The Medicaid Model, Razor Thin Profitability

Thanks to ObamaCare, 57 million of USA’s less fortunate have Medicaid healthcare insurance. The Republicans attempted to gut Medicaid and miserably failed to make good on their 7 year fight. Ironically, the Medicaid expansion saved ObamaCare.

As much as I love bullying the conservative Republican bullies, those assclowns are symptoms of the USA healthcare insurance system’s premium profitability thirst. The USA government babies=subsidizes about 66% of the healthcare industry.

An aside

Consumer spending is erroneously reported as 2/3 of GDP. That 2/3s is the government subsidized healthcare programs.

Medicare accounts for about 40% of the healthcare subsidies, Medicaid 20%, and the remaining 6% rests between Veteran Affairs and the USA’s military TriCare. Politicians were wise to leave Medicare off the chopping block table for fear of cushy job losses. However, conservative politicians didn’t expect their majority old white voter base would also come to bat for Medicaid.

ObamaCare isn’t the broken model; the broken model is healthcare insurance investors' greed. Investors expect healthcare insurers to grow by double digits every year. United Healthcare Inc, ticker UNH, is the USA’s largest insurance corporation. It has returned around 40000% since it was founded more than Microsoft, Netflix, and Amazon combined. For every USD$10k originally invested, a UNH investors' shares are now worth $4 million, damn! And UNH continues to grow by double digits 30 plus years later with a healthy dividend.

How does a boring healthcare insurance corporation maintain double digit growth profitability year after year?

At least 66% of UNH’s business is subsidized by taxpayers, government subsidized healthcare programs. Under the ObamaCare law, healthcare is mandatory so insurance companies know there is a potential pool of 320+ million USA citizens in the mandatory market for healthcare insurance. The rest of UNH’s business, insuring private businesses=employers, makes up the rest of profitability potential.

UNH’s private healthcare insurance segment is consistently its best money maker averaging low double digit percentage increases every year. UNH is able to increase private healthcare segment profitability because there are no rules to gowging? private employers vs government backed healthcare programs. Hence, private employers routinely pay double or triple the costs of government subsidized programs. Big government is good for some things. 😉

Big government regulations control healthcare costs. When we look at UNH’s profit margins, we see the less regulated segments earn the most money. Private employer healthcare is most profitable and the least regulated. Medicaid is the most regulated and least profitable.

The Patient Protection Affordable Care Act (PPACA) colloquially known as ObamaCare increased the patient pool size for UNH’s least profitable segment, Medicaid. Also, Medicaid consumers tend to use their healthcare more so than the private working class, a double whammy for profitability. Losses on UNH’s Medicaid segment mounted to a billion+ since ObamaCare became the law. UNH can’t by law increase Medicaid premiums by much to counteract the loss in profitability.

What do you think the major insurers decided to do about helping the less fortunate?

If you guessed that the major healthcare insurance corporations dropped coverage for the less fortunate, Medicaid consumers, because it hurt their wealthy shareholders' profitability margins then you guessed right. UNH as well as the other biggest publicly traded healthcare insurance corporations dropped coverage for ObamaCare primarily because of their Medicaid segment losses. The baby cap stocks specialising in Medicaid like Centene and Molina Healthcare continue to pull their mass at razor thin profit margins.


Big government should make Medicaid the universal USA healthcare standard for everyone in the 25% marginal tax bracket and below because of its razor thin profitability margins. If the government truly wanted to control healthcare costs then adopting a Medicaid standard model would be ideal.

Under the ObamaCare, the federal government pays no less than 90% of the cost to cover newly eligible people, which includes anyone earning up to 133 percent of the federal poverty level, or about $16,000 a year for a single person.

According to GoogleFinance, Centene and Molina Healthcare average profitability between 1-5% for example. The Big 5 healthcare insurers' profitability margins are in the double digits. It is hypocritical for Congress to claim healthcare cost control then attempt to dismantle Medicaid, the program that controls healthcare costs the best.

Ironically, the reason the Republicans' American HealthCare Act (AHCA) ultimately failed was thanks to the fine work of the Congressional Budget Office’s projection that 24 million Medicaid consumers would lose insurance coverage. The AARP-ers threat to email every yes vote to all 38 million AARP members helped too. AARP, old majority white people club, is the voter base of the Republicans and when they threaten cushy jobs, their Congressional reps better listen. Fortunately, Ryan and his merry band of conservative assclowns voted to save their jobs and cancelled the AHCA vote, first collective smart conservative decision in 2017.

Everyone thank an old white AARP member today then ask them to direct their future healthcare angst attacks towards the premium profitability root cause, the Big 5 USA healthcare insurers dropping out of helping the less fortunate ObamaCare consumers: United Healthcare, Anthem, Aetna, Cigna, and Humana!

If we want to control healthcare costs then let’s adopt the most efficient model, the Medicaid model. ☺

Was it Helpful? If your answer is Yes! Then I would ask for shares from your side, please click that little green heart below. You may never know that your share may be evidenced helpful for many of the users out there. So, keep sharing and liking my content over social media.

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.