As a 25 year veteran of the health insurance industry, and having current appointments with over 80 companies in the US, I believe that the health insurance business is on the brink of the greatest increase in profitability since 1965 when Medicare was established.
Whether or not 'Obamacare' becomes completely instituted in 2014, there can be no doubt that a change is in the wind. When I was new to the insurance business I met many insurance professionals who had at one time believed that the coming of Medicare in 1965 would mark the end of the profitable health insurance business of the early 60s. They believed that once government got involved in picking up the lion's share of the healthcare costs for those retirees over the age of 65, or those who are disabled, that the most lucrative segment of the population in terms of health insurance premiums would disappear... leaving insurance companies high and dry. Actually, the opposite occurred.
With Medicare, the government picks up most of the responsibility for the claims of seniors, and the disabled, many of whom have chronic illnesses. Ask anyone on Medicare how much their insurance company paid of a hospital bill; many would say 'they paid it all!' However, once they review the Explanation of Medicare Benefits (E OMB), which is the statement that Medicare provides of payments made by Medicare toward doctors and hospital bills, they see that on a hospital stays costing $150,000, that their insurance company only paid the $1156 Medicare Part A deductible. In fact, there are probably many DRG (diagnostic related groups) adjustments, so that the hospital is actually paid much less than the billed amount. Once some form of government-sponsored healthcare plan is in place, insurance company profits will increase because the amount of risk that is underwritten by an insurance company is greatly limited, and subsequently, premiums are also reduced. However, insurance company profit margins increase significantly.
Most people receiving Medicare entitlement benefits are quite pleased with it. Even wealthy beneficiaries are glad to have Medicare benefits, and not matter what the politicians want you to fear, Medicare is not going away, although it will most likely present a higher greater percentage of the annual budget, this money will be generated at a cost to the defense dept., education, or some other area, but as the US is a country with a population that is aging, it is politically suicidal to threaten to repeal Medicare.
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