Insurance fees are not high because the insurance companies are making huge profits.
They're high because providers are making huge profits.
Now granted, they may ultimately be the same thing, but that's a different discussion [1]
In the context of housing (fires, hurricanes etc) insurance is expensive because housing is expensive to build.
[1] insurance companies have to invest their income somewhere. It makes sense to choose companies will high returns. Which includes some health care providers. Which can basically change whatever they like because of structural reasons that have been well discussed.
> Insurance fees are not high because the insurance companies are making huge profits.
United Healthcare alone made $23,000,000,000 in profit in 2023. Health insurance companies have collectively made $371 billion in profits since the passage of the Affordable Care Act.
Property & Liability insurance (home, car, etc) have relatively modest profit margins, but health insurance companies absolutely are making huge profits.
Using absolute numbers here doesn't really make sense. 23B sounds big but its impossible to say if its a high or low profit margin without context.
It’s profit and it’s very large.
> alone made $23,000,000,000 in profit in 2023
why is this number considered huge? What measure are you using? These absolute numbers are meaningless, because you have to put it into context. That's why profit margin is what analysts use, not the absolute number.
If i changed those figures to: they made $77 per person, per year in the USA for providing healthcare services, does that still seem as big? Or is it now reasonable?
$23,000,000,000 profit/29 million insured makes $793 profit per insured person.
That's huge isn't it? $800 bucks in profit per customer? What does Apple make? Or Unilever?
Why compare to Apple, when the healthcare is arguably more complex and expensive?
the original OP is claiming that the healthcare industry is too profitable. So you have to compare it to something to see if it is too profitable.
Right, but why use Apple ($800 phone every 2-4 years) compared to say, an automaker ($40k in depreciation over 10 years) or a REIT ($2000 in rent every month)? Moreover, why focus on absolute profits? If the healthcare industry split into 3 (eg. doctors, dental, drugs) but with the same margins, does that mean they're suddenly not "too profitable"?
No, UnitedHealth Group made $22B in profit in 2023. Only about half of that profit came from the UnitedHealthcare insurance business. The other half came from the Optum side which is a mix of non-insurance stuff. Optum makes huge profits on software: if the software business was spun out it would be one of the top 20 US tech companies.
https://www.unitedhealthgroup.com/investors/financial-report...