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Comment by ShinyNewFeature | Hacker News Reader

In many jurisdictions in the US, there is a requirement for the casino and lottery operators to pay a certain percentage (typically 90+%) back as winnings.

Do health insurance companies have to follow similar requirements? If so, individual cases of insurances denying insurance would be bad, but would indicate that the overall system is still working reasonably well.

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Indeed, they do. The ACA set a 80% requirement.

Unfortunately unintended consequences have resulted in that meaning it benefits health insurance companies to increase the cost of care so their 20% share is more.

Health insurance companies conspiring with each other and with providers to drive up costs is not an unintended consequence of the ACA, it is a predictable consequence of monopolistic collusion. Imagine saying "all the grocery stores are intentionally increasing the cost of eggs in order to increase their cut" -- that's just straightforward illegal behavior that should be a slam-dunk anti-trust suit. Don't blame the ACA for that.

The tragedy at the heart of this "hate health insurance companies" is that they aren't even very profitable businesses. Their margins are actually below average, and pretty poor investments compared to things like tech and finance.

Walmart has low margins, too. Still a very profitable business, because the raw revenue numbers are so huge. The same applies to health insurance.

Right, but with a low profit margin you get stagnation and monopolies.

No one is looking at absolute raw numbers, investors/owners usually only own small slices, so they care about what percentage return they get.

Tragedy?

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