Study reveals UnitedHealth's profit margins four times what it claimed [pdf]

getnormality

> Conventional accounting measures portray large health insurers such as UnitedHealth Group (UHG) as earning relatively low profit margins because they treat premium dollars that are subsequently paid out in medical claims as revenue. However, these medical claims are pass-through costs, not income retained by the insurer. I don't understand this claim. Doesn't every business have costs to make its goods and services, and revenue when those are sold? A grocery store sells food and uses the money to buy more food, pay its employees, reinvest etc, and the profit leftover goes to the owners. An insurance company sells policies and similarly uses the money to pay claims, pay employees, reinvest, and profit. Why is the insurance company's sales revenue pass-through and the grocery store's sales revenue not? Update (30 minutes in): the replies so far all seem very superficial. Yes, I know that insurance is not exactly the same as grocery stores. This does not explain why they should suddenly be treated differently from an accounting perspective despite what everyone else before this moment has done.

John7878781

It's hard for me to trust this PDF when there's literally a typo directly under the author's name: "analyitcs"

CGMthrowaway

@getnormality Two main differences: 1) medical loss ratio rules mean insurers are expected/required to pass a certain percent of premium on as payment for medical services, in a way that a grocery store is not required 2) insurer is selling you a contract that they will pay your medical bills if you have any - they are NOT retailing you medical services 3)

Varelion

So many die every year because of the US' dogshit system -- and it's never enough.

LorenPechtel

I don't understand. Brokers quite correctly do not count the value of the shares because they never actually see it. But that's not the way insurance works--while dollars flow in and dollars flow out they are not remotely the same dollars. This feels like someone is trying to lie with statistics.

thataccount

Medicine is big business. Insurance exists because people are betting against their health. Profits this high indicate insurance is REALLY GOOD at getting people to bet against themselves.

WarmWash

The nice thing about stuff like this is that you can check the stock price to see if it's actually meaningful. You're not gonna surprise a bunch of wallstreet analysts with a finding that profits are actually 4x, and if you do, the gap up in stock price would be near instant. That being said, while $UHG has had a good year, the stock is still underwater from where it's been since 2021, and no noticeable movement from this report.

jeffbee

If you substitute the word "Claims" for the word "Reveals" then the headline is honest.

mchusma

Some of this has to do with limits from the ACA (Affordable Care Act), which limited the margins of insurance companies. It creates incentives for higher premiums, but also these types of gains, which is just bad for everybody. I don't think there's much you can look at with the Affordable Care Act and think that it was a success.

micromacrofoot

UnitedHealth just raised my monthly premium by 25% for 2026-27

throw0101d

Somewhat related perhaps, "Universal Health Coverage Could Save $1 Trillion and 114,000 Lives Every Year, Yale Study Projects": * https://ysph.yale.edu/news-article/universal-health-coverage... Study: * https://doi.org/10.64898/2026.07.22.26358689

josefritzishere

This is a crime against humanity.

schlap

Well this hasn't been peer reviewed whatsoever, WOW.

LocalH

Luigi intensifies