You touch on the “for-profit vs.

Hey, Mal! So ‘fess up — are you actually a dog?

I don’t actually get the moral argument against for-profit healthcare financing, for two reasons. One: A lot of people make a lot of money from healthcare, and mostly we are fine with it because they add a lot of value. healthcare is a fount of good jobs, perhaps the single most robust part of the economy. Our concern is only when people seem to make excessive amounts of money without adding value.

So the other reason is: In comparing for-profit vs. not-for-profit, do we consistently see that the for-profit companies bring less value, that they in fact are raking more off more to give dividends to their shareholders? Actually, we don’t.

That is in part because under the ACA, profit is effectively capped. Insurance companies have to make sure that 80% or (for large accounts) 85% of what they take in as premiums gets paid out for actual medical costs. That’s called the “medical loss ratio.” They can do what they want with that other 15–20%, including paying their administration costs, marketing, huge executive salaries (the CEO of a large-state not-for-profit health plan may easily get $10 million salary) or paying out dividends to their shareholders. But it’s the same percentage whether they are for-profit or not-for-profit. The profit they throw off has no effect on their premium price or what medical services they pay for. Can’t, by law.

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