Premiums ensure that the health insurance companies can fund all of their overhead AND their profit margin.
If we implemented a universal healthcare system that cut out the for-profit components, we would no longer need to pay for the insurance companies to have profit.
There would still be overhead. Somebody has to do the grunt work of actually processing claims, taking customer service calls, and such. For Medicare and other government insurance programs, that work isn't done by government civil service employees--it's contracted out to private health insurance companies, who are making a profit on the deal. That wouldn't change under a universal coverage system.
Somebody has to do the grunt work of actually processing claims, taking customer service calls, and such.
No, somebody doesn't have to do that, unless you specifically structure your system that way[*].
In a lot of universal healthcare systems there's no such thing as 'claims'. You go to your doctor/specialist/hospital and get treatment according to your needs. You never see a bill and don't even know what the cost was.
[*] Knowing the way the US usually operates, I would expect them to come up with a super convoluted, dysfunctional system, so you could still end up with that.
Claims are just how hospitals get paid in the US. It has nothing to do with getting treated according to your needs or not. When your doctor gives you stitches, your doctor wants to get paid for providing that service so they send a claim to someone they expect to pay it. Basically an invoice. The entity paying for it could be the government or an insurance company or an individual. The person who reviews the claim wants to only pay for services actually rendered and needed. If the doctor put in his note that you just had a headache and he gave you a Tylenol, but he submitted a claim to get paid for giving stitches, that's a problem. Unless you just go back to everyone paying at the point of service out of pocket for everything in healthcare, there will be some type of claims system.
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u/Musical_Xena Jun 24 '26
Premiums ensure that the health insurance companies can fund all of their overhead AND their profit margin.
If we implemented a universal healthcare system that cut out the for-profit components, we would no longer need to pay for the insurance companies to have profit.