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Because they make more by not paying than by paying... When the payouts are larger, they raise premiums, make money on both sides.

Not to mention, if they can delay payment for a month, that's a month worth of interest on the money in an interest bearing account.





How exactly do they make more money by not paying? They're required to spend 80% of their funds on provider expenses. The only obvious way to sustain the narrative that insurers are distorting the system for profit is the preceding comment's hypo that they'd be over-paying (and then driving rates up as their expenses increased). You propose the opposite fact pattern here.

(Net cost of health insurance, all expenses, is around 6.5% of total US spending, as against 51.5% of direct provider costs for doctors, nurses, and procedures, not counting prescriptions.)


They keep the 20% that they don't pay out... what they do pay out, they get the invested fraction of, which is less than than what they paid out.

Even if they only get to keep up to 20%, doesn't mean they will pay a dime of what they can get away with not paying.


"What they do pay out they get the invested fraction of"?

If an insurance company owns 20% of the service provider, they only make a fraction of what the insurance arm pays to the provider arm.



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