[anthuswilliams]

Insurance companies absolutely benefit from the higher and opaque prices, because they negotiate rebates with providers. This allows them to maximize patient copays and ensures they hit their deductible, i.e. paying as much as possible under their respective insurance plans. Contrast this with a no-rebate world with cheaper/more transparent pricing. Fewer patients would hit their out of pocket maximum.

They can use the rebates they get from the providers to subsidize the insured, allowing them to offer lower premiums and gain market share. This is what people mean when they say "In America, the sick people pay to subsidize the health care of the healthy people".

Of course, that above only applies if there is competitive pressure. If there is no competitive pressure (e.g. in states with only one or two insurers), they can keep premiums high and book as profit the difference between what the patient paid out and what the patient would have paid out in a lower-cost no-rebate world.

[lotsofpulp]

> Contrast this with a no-rebate world with cheaper/more transparent pricing. Fewer patients would hit their out of pocket maximum.

And premiums would go up. Every insurer has to get their premium approved by every state’s insurance regulator, and every state’s insurance regulator is not going to allow them to have more than a few percent of profit.

> They can use the rebates they get from the providers to subsidize the insured, allowing them to offer lower premiums and gain market share. This is what people mean when they say "In America, the sick people pay to subsidize the health care of the healthy people".

I’ve never heard of this, and it’s legally not allowed. The ACA mandates insurers price plans so that old people only pay at most 3x what young people pay. And the ACA does not allow insurers to charge more to people likelier to need healthcare. Mathematically, that means younger and healthier people pay higher premiums so that older and sicker people can have lower premiums.

NY state goes even further and says all ages pay the same premium, so young subsidizes old even more. MA has a 2x cap, I believe. And then of course, FICA taxes mean the young and working are paying for the healthcare for the old and non working, the vast majority of all healthcare spend in the US (Medicare).

[anthuswilliams]

> And premiums would go up.

Yes. As I wrote above, insurers compete on premiums, and they do do so by using rebates to subsidize those premiums by spreading patients' deductibles across the insured population. As far as profits go, I can't speak to regulatory issues since they will vary by state, but in any case the same critique would apply if insurers are pocketing a fixed percentage of a larger amount.

Re your second point, it completely twists my point and is largely irrelevant. Yes, older people paying the same premiums as younger people is a counter-argument in that older people are more likely to need healthcare, but the central point is that people who have to USE their insurance (i.e. sick people) subsidize the premiums of people who don't (healthy people), and this critique applies regardless of age. Now, one could argue that the structural factors that control costs across age cohorts counterbalances this phenomenon. And I'd agree with you! But that doesn't negate the original point that insurance companies benefit from, and advocate for, high sticker prices.

[vjvjvjvjghv]

Everybody in this system benefits from this insanity, except the patient.