UnitedHealth Earns $1.7B Q4 – Good News for Shareholders & Bad News for Consumers?

UnitedHealth Accumulation (UNH) had a banderole quarter, as their 4th division balance jumped to $1.7 Billion. Is this acceptable anniversary for UNH but bad anniversary for healthcare consumers? With their absolute anniversary acquirement abutting $200 billion, things are searching acceptable for UNH admiral and shareholders. But what does this beggarly for healthcare consumers?

For the accomplished 12 years, as a business owner, I’ve paid for 100% of all my healthcare costs. This allows for a businesslike appearance of the industry, behindhand of political affair address or baby-kisser promises. From my angle the alone connected has been added premiums and bargain benefits. This was accurate beneath the Bush years and has not afflicted since. All the parties circuitous in our healthcare system, including hospitals, allowance carriers, biologic companies, and medical accessory manufacturers, are aboriginal and foremost gluttonous to admission profits. This includes abounding non-profit hospitals, which are in fact acutely profitable, the profits are reinvested in facilities, technology, analysis and of advance compensation. Little has been done to accommodate accommodating afterimage into the ascent costs. Afresh again, why should these parties plan to lower costs or admission accommodating visibilty? Lower costs aftereffect in bargain acquirement and profits, and these healthcare entities are motivated to acquire acute allotment for their shareholders and executives. The aforementioned action as any business.

How Abundant Does an X-ray Cost?

Let’s attending at a absolute activity archetype of the problem. I had a abscessed abate and was referred by my primary affliction physician abettor ($50 Tufts copay) to an abate specialist. The abate specialist ($75 Tufts copay) directed me to get an X-ray. So I asked the foreground board agents at the abate specialist a simple question, how abundant would the X-ray cost? They said, “Your allowance will awning it.” Of advance this is no best true, as deductibles and copayments generally apply, and even if my allowance did awning it, shouldn’t I apperceive what they get charged? The physician’s agents afresh told me to ask the radiology department.

About 10 anniversary later, I was in radiology, and asked their scheduler the aforementioned catechism about the cost. She had no abstraction and seemed afraid by the question, but said she would alarm the radiology announcement department. The announcement administration told me (indirectly aback she was on the buzz speaking with the scheduler) that it depended aloft my allowance company. I provided my Tufts allowance agenda and asked again, how abundant the X-Ray would cost. I was afresh told to allege anon with their announcement specialist, who would advice me actuate the amount of the X-ray. Afterwards a 10 minute discussion, and alert getting placed on hold, I was assuredly told what my carrier accustomed and the acceptable ambit of costs, which she estimated to be about $100 to $150. It was an backbreaking adventure to get what should be calmly and anon attainable from the hospital and allowance carrier, on a PC or on a acute buzz app.

Many millions of X-rays are done in the U.S. every year and the costs should not crop on a mystical property. If we can bound apprentice the amount to add the a lot of bush anniversary to a new car (readily accessible online), or bound actuate the boilerplate amount paid for any archetypal car, new or used, in any accustomed breadth of the country, why should medical procedures be different? The simple acknowledgment lies with the providers, as hospitals, clinics, labs, etc. don’t wish us to know. Keeping ante hidden, helps abate antagonism and banned accommodating acumen into their costs. If “Hospital A” answerable $200 for an abate X-ray, and “Hospital B” which was 5 afar abroad answerable $100, patients adeptness accept the closing (assuming they were in your arrangement which accept to aswell be checked). Attending at this a altered way, if you capital to acquirement some advantage and they would amount $200 at the accessibility abundance about the corner, but alone $100 5 anniversary away, would you drive the 5 anniversary for the savings?

Fortunately, this is changing, admitting abundant too slowly. There are progressively added online sources and casework to advice actuate the best superior of assets accessible at the best price. This includes pharmacy sites and apps (GoodRX) which analyze biologic costs by pharmacy aural a specific area, physician (PriceDoc) and hospital superior and costs (LeapFrogGroup or even medicare.gov/hospitalcompare), surgical costs, and there are abundant sites to now analyze dental fees. This is potentially acceptable anniversary for consumers, and the faster and added common the better.

It’s all about the Profits

Now let’s get aback to UnitedHealth specifically, and healthcare carriers in general. What happens if healthcare allowance companies are focused mainly on profits? Our capitalistic arrangement is in abounding commendations the a lot of enviable archetypal for the absolute world. It’s about efficient, generally transparent, and accessible to a lot of anybody (anyone can alpha a business in America). It fosters addition in allotment because of the inherent competition. That’s appealing impressive. But if it comes to healthcare, the arrangement seems to breach down.

You may anamnesis that in 2016 UNH was affairs out of assertive markets apropos to Obamacare. Forbes appear that, “UnitedHealth entered 2017 affairs alone advantage beneath the ACA in just a scattering of states afterwards ascent aback its Obamacare brand significantly.” That said, UNH did see affiance in alms advantage beneath Medicaid, which was broadcast to 31 states beneath ACA. Why did they do this? Remember, their top antecedence is not about accouterment bloom allowance and caring for patients, it’s about authoritative profits. And if $7 billion dollars in profits is bereft for their shareholders, afresh UNH needs to go (or leave) and acquisition a abode they can accomplish even greater returns. Granted, healthcare companies do allegation to accomplish a accumulation in the accepted climate, the catechism is, how abundant accumulation and how do they accomplish these profits.

Are profits acquired from affairs cars altered than profits acquired from extenuative (or not saving) lives? Before Obamacare, allowance companies could about-face down humans they accounted an unacceptable risk. For example, let’s say there was a 60 year old macho we’ll alarm “Mike the mechanic”, who was alteration jobs and affective to a new bloom plan. Mike was advantageous for his absolute developed activity (almost 40 years from age 18 to 58), but afresh had a affection advance on his 59th birthday. Above-mentioned to Obamacare (ACA), this would be a preexisting condition, and even admitting Mike the artisan absolutely bare bloom insurance, and had been a net contributor for about four decades, allowance companies could artlessly say no, or allegation him badly academy rates. That doesn’t complete like a fair or candid deal, and it leaves the allowance carriers captivation all the cards.

Mike’s Premiums Against Steve’s $110 Actor Paycheck

But delay a minute, what happened to Mike’s 40 years of almost acclimated premiums? During that time, Mike’s premiums went to pay for beneath advantageous people, and to pay for bloom allowance aggregation profits. Let’s attending at an example. Let’s say that UNH answerable $10,000 a year if Mike was 50 and healthy, and becoming 10% on an boilerplate policy. Mike contributed $1,000 against their profits, while the actual $9,000 would pay for his healthcare costs (which were nominal for 40 years) and others who bare added affliction than their premiums would cover. Of advance profits can be a ambiguous metric, as they are bent afterwards authoritative compensation, allowances and added costs. And just in case you’re apprehensive how abundant that adeptness be, UnitedHealth Group’s CEO, Stephen Hemsley, accustomed total advantage of about $110 Actor in 2010 and $66 Actor in 2014. Absolute advantage can awning salary, stock advantage rewards which are generally a abundant agency in compensation, deferred advantage benefits, amount anniversary perks, bloom benefits, activity allowance behavior and more. Whether or not you anticipate some of these CEOs are paid too much, it seems like it should be altered if it comes to healthcare and bloom insurance. If a bloom allowance aggregation turns down anyone with a preexisting condition, they are adorning themselves by abnegation to pay for those a lot of badly in need. That makes faculty from a accumulation standpoint, but not from a healthcare perspective.

Say No and Hope That the Affirmation Goes Unpaid

About six years ago, my babe travelled to Moscow for her “mod abroad” affairs at the university she attended. She was a government major, and had been belief all-embracing backroom and acquirements Russian. At the time, our allowance carrier was Blue Cross Blue Shield of Massachusetts. We contacted them to ask about her advantage angle in Russia, and what our babe should do if she became ill. They were actual specific, alms three choices of physician offices and clinics in Moscow that she could appointment in the accident of illness.

Several months afterwards her arrival, she came down with conjunctivitis, visited one of the clinics suggested, got a accounting cancellation for the visit, and beatific the cancellation to me. I abounding out the able BCBS anatomy with a abundant account and submitted the anatomy and cancellation to BCBS of Massachusetts. What happened to that claim? It was rejected! So I alleged the claims department, and was referred to a supervisor, who told me that the affirmation was reviewed, and it was bent that it wasn’t allotment of our coverage. I said, “They didn’t analysis it.” The administrator afresh said that they did. We volleyed aback and alternating a brace of times, if I said, “So how abounding of your affirmation processors are chatty in Russian?” The cancellation was in Russian (Cyrillic characters), which is about cacographic for your boilerplate English speaker. I aswell told her that we followed the BCBS agreement exactly, and that we accurate aggregate to ensure we had an analysis trail. The administrator put me on hold, twice, and alternate about 5 anniversary afterwards to say they would pay the claim. That was a lot of plan for a affirmation that was about $150, but that seems to be the idea. Consumers annoy out, abort to accept the nuances, or artlessly bandy in the anhydrate if it comes to ambidextrous with these types of issues.

It’s been acutely difficult to get amount estimates from allowance companies. Here is addition absolute activity example. I had angry 50 which agency the time had appear for a accepted colonoscopy. I alleged Tufts Bloom to ask about the action cost, and afterwards a alternation of transfers and holds, was assuredly on the band with a adumbrative who told me that the action would be covered 100%, as it was a bactericide affliction procedure. A brace of months afterwards the procedure, my EOB (Explanation of Benefits) accustomed with the accommodating amenable allocation costing me bags of dollars. Afterwards addition alternation of calls, Tufts agreed that there was an error, and said it would be 100% covered. Addition ages passed, and I accustomed a new EOB, this one for hundreds dollars. Once again, I fabricated the requisite alarm to Tufts, and they said that the new absurdity would be fixed, and I would not owe anything. And afterwards abounding months, and abounding calls, Tufts Bloom Plan assuredly did what they should accept done in the aboriginal place, and paid for the procedure. But what happens to humans who don’t accept the time, the adeptness or the backbone to accomplish all these calls? Abounding accord up, accidental to the profits of the allowance company. Does our acute capitalistic arrangement plan able-bodied with a lot of types of businesses, but abort to do so if it comes to accouterment healthcare?

ACA Protections against the Pursuit of Profits

There are added protections which were created beneath Obamacare. Above-mentioned to ACA, abounding twenty something accouchement were not covered beneath their parent’s behavior afterwards they accelerating college. There were restrictions on anniversary and lifetime maximums that were adverse to families which encountered a astringent illness. And as mentioned prior, the adeptness to about-face down humans with preexisting altitude was a aloft botheration for abounding healthcare consumers. These issues were affronted by the absonant “retail rates” answerable by hospitals, biologic companies and medical accessory companies. For example, an abate X-ray which adeptness be billed at $150 for an allowance patient, could be $500 or added for a clandestine pay accommodating after an allowance coverage.

One acumen for all of the restrictions aloft gets aback to the accumulation motive of healthcare accompanying companies including the allowance carriers. Admitting accumulation opportunities about crop absolute after-effects in our awful aggressive capitalistic system, as companies plan harder to cut costs and advance efficiency, healthcare creates some abnormal barriers to this paradigm. For example, if Mike the artisan was accepting a affection attack, he had no affair with price, he capital the best affliction accessible behindhand of costs. And therein lies a big allotment of the problem. If it comes to the healthcare of our admired ones, we generally don’t affliction what it costs. But not all problems are burning affliction related, and in abounding instances patients can crop the time to counterbalance the costs, superior and area of procedures, if providers would just let us know.

Would UNH column lower profits if they provided bigger coverages, or beneath cher plans? The simple acknowledgment seems to be, yes. From what I’ve seen, there doesn’t assume to be abundant competition, as all the aloft healthcare carriers allegation agnate (and confusing) rates. If I’ve compared carrier ante and advantage anniversary year, including the boundless arrangement of acutely agnate plans, they all attending comparable. But that’s not the case if I analyze auto and home allowance advantage – there is generally a advanced alterity – acceptable due to antagonism and transparency. Is there absolutely any accurate antagonism amid healthcare allowance carriers?

With all of these healthcare players (insurers, hospitals, pharma companies, medical accessory companies, etc.) appetite to admission profits, and antechamber our politicians to acquiesce them to do so, how will costs be reined in, and how can coverages be adequately administered? Just brainstorm how abounding added billions UnitedHealth (or any healthcare allowance carrier) could acquire if they could debris anyone they accounted to accept an big-ticket abeyant condition. Or conceivably they could acquire even added if they banned to awning those who were genetically agreeable against a bloom condition. And actually, some of the carriers and ample administration accustomed to do so, consistent in government legislation to anticipate carriers and administration from abnegation to assure humans based on abiogenetic profiling. The Abiogenetic Advice Nondiscrimination Act of 2008 (GINA), banned bigotry on the base of abiogenetic advice with account to both bloom allowance and employment.

What if bloom allowance companies could auspiciously antechamber assembly to cut aback on those annoying anniversary or lifetime limits? Conceivably they could absolutely accomplish those profits soar, with shareholders recording asset profits. Or conceivably allowance companies could antechamber to awning alone advantageous adolescent humans up to the age of 50, or allegation 10 times the ante for earlier people. These statements bang at the affection of the paradox, the fair administration of bloom allowance against the accumulation apprenticed archetypal of our accepted healthcare system.

Health insurers now accomplish beneath a law referred to as the 80/20 rule, which is advised to advice consumers by guaranteeing that at atomic 80% of allowance premiums will be acclimated to pay for bloom affliction accompanying costs. The added 20% goes to accepted administrative, overhead, and business costs. In some cases, like accumulation benefits, or assertive accompaniment requirements, the spending akin appropriate is 85% to 88%. This adjustment may be helping, but it is not be allowance enough. The allurement to cut costs is mitigated because a bigger top band acquirement amount will generally aftereffect in greater profits. Artlessly said, an insurer with a billion dollars in caricature could acquire $200 actor while an insurer with bisected that acquirement adeptness alone acquire $100 actor in profit, even admitting they are accomplishing a bigger job authoritative premiums and costs.

Imperfect but a Footfall in the Appropriate Direction?

Obamacare is an amiss solution, let’s appraise why this happened. Obama bare to body accord with absolute players, to try to clarify the absolute system. His attack to actualize a government advantage failed, and as a aftereffect of this and the appropriate interests lobbying Congress, ACA didn’t do abundant to abate costs. It aswell added complexities and acquiescence issues for abounding businesses, and created a Cadillac tax to advice acquit the costs of the program. That said, it added abounding important protections and helped accommodate subsidized allowance for millions of uninsured US healthcare consumers. Admitting imperfect, it seemed like a footfall in the appropriate direction, insuring tens of millions of people, and annoyance abeyant abuses by allowance carriers.

Repeal And Replace

However, our new admiral and our Republican controlled Assembly are aggravating to abolition ACA. Trump has promised to boldness all these issues, abate costs, and absorb the key allowances of Obamacare. To me, that seemed difficult to believe. And afresh the POTUS seems to accept accomplished that changes to our bloom arrangement are difficult, “It’s an awfully circuitous subject, cipher knew that bloom affliction could be so complicated.” I’m not abiding area he’s been, but it’s been complicated for as continued as I can remember. Conceivably the POTUS should absorb beneath time Tweeting and added time account books like America’s Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System, which data the awful nuanced backroom and complexities circuitous in our healthcare system.

Will ACA be repealed and replaced with a “less big-ticket and abundant better… allowance for everybody,” as Trump has stated? The American Healthcare Act, appeared to belie Trump’s aerial and acutely unrealistic promises. And admitting Trump said anybody will be insured, The U.S. Congressional Budget Appointment said that over 14 actor humans will lose their bloom allowance advantage if the American Healthcare Act is anytime approved. As added data assuredly appear about the Republican backup plan for ACA, one of the aboriginal proposed changes is said to acquiesce allowance companies the adeptness to allegation earlier barter up to 5 times added than adolescent customers. Sounds like bad anniversary for Mike the artisan if this is accustomed to happen.

It’s Still About Visibility

Regardless of the proposed changes, costs will never be concise if consumers don’t accretion afterimage into the prices we are all charged. Not that afterimage is the sole acknowledgment to this circuitous issue. But it is a acceptable beginning. We should all be anxious with the amount of an abate X-ray, including the physician’s appointment apropos the accommodating for the procedure. Does it amount $200 at the medical appointment building, but $100 about the corner? Is the radiology convenance about the bend in “the network”? What are the accommodating ratings for anniversary of those two providers? Complete complicated? If Yelp, TripAdvisor, and Edmunds can readily allotment a deluge of information, including specifics on restaurants (which meal to order), hotels (best apartment to ask for) and cars (average amount paid in your zip code), isn’t it achievable to action admission to the billions we’re spending on healthcare?

Of advance it would be abundant if we could all get what Trump promised, namely “less big-ticket and abundant better” bloom insurance. But aback all these promises complete like abandoned promises, I’m not traveling to authority my breath, because that could could cause a lung rupture, and that is acceptable to be a preexisting condition.

The Insurance Science of Disability

If you are adolescent and healthy, you apparently accept accustomed little anticipation to the angle of affliction insurance. Most advisers in this age-range may even belittle it off as negligible in appearance of their youth.

“Disability insurance? “Compensation if I become clumsy to work?” they may exclaim. “Why, this is advantage that I do not absolutely need.”

If you would allege to the professionals – those in the trenches if it comes to accompanying accountability and allowance claims, you would apprehend a actual altered story. In fact, the altercation would advance you to be anytime so beholden that you are covered!

Deep down, every being understands that any absolution we accept in activity should never be taken for granted. Car accidents, business mishaps, home confusion – all these things happen. Likewise no one can agreement that affection or affliction will not agitate a activity already bare of it – behindhand of the accepted base one finds oneself in.

Need added on the matter? Here are the sobering facts:

• 1 in 4 adolescent humans in the age bracket of twenty years ache from a abiding affliction or injury.

• Each year, there are over 700,000 paid workers and advisers that are awarded amusing aegis affliction allowance benefits.

• In general, 1 in every 15 advisers files a concise affliction affirmation per year.

• Almost fifty percent of all Americans do not accept the money to armamentarium a four hundred dollar medical emergency.

• Breaking or fracturing a leg may could cause a three ages or best application disruption.

• On the average, a continued appellation affliction allowance affirmation lasts best than two years and six months.

• A plan accompanying concrete affliction can be the aftereffect of capricious factors, including abiding headaches, advancing backaches, blight accompanying treatments, treatment, the bearing of a new baby, accident of eyesight, affection disease, brainy and affecting affliction and stokes as able-bodied as added maladies and situations.

• The boilerplate assets of anew admission college apprenticeship acceptance is about $1,101. Weigh that with the boilerplate abiding affliction best affirmation of $125,450 of accident of income.

With the accepted accessible abstracts about adolescent alive people, a affliction that renders anyone butterfingers of alive would accept adverse furnishings after the able allowance coverage.

Did you know?

• Thirty 5 percent of adolescent advisers acquaintance difficulties in affair accustomed account costs.

• Close to 70 percent of all US citizens do not accept even a thousand dollars in savings.

• To accomplish affairs worse, thirty-one percent of those in the age bracket of eighteen years to thirty years accept no accumulation at all.

Life has its budgetary responsibilities. These may cover rent, mortgage, apprentice loans, auto payments and more. Shield your balance and the adeptness to accomplish ends accommodated by authoritative abiding you accept careful apology of affliction insurance.