> health insurers...'re on your team and benefit from lower prices just as much as you do
You're missing a very, very, very important piece here.
Which is that the lowest price of all is to deny treatment entirely.
They are not on your team, they are the opposite team. Their revenue is basically fixed, at the level of your premiums. But the more health care they pay for you to receive, the less profit they make. That's just arithmetic.
This is why there are so many horror stories of people being denied necessary treatment, or having to fight for months and years to get their treatment actually paid for. Insurance providers are incentivized to do their absolute best at taking your money and then not paying for care, through every sort of technicality and "mistake" and arbitrary judgment and limit they can come up with.
They still do, because that's a minimum. If they have to spend 80% of premiums on medical care, then they make a lot more profit by spending just that mandated 80%, as opposed to 85% or 90%. Which they can achieve by denying claims. That's the direct financial incentive.
You seem to be confused about basic arithmetic. First of all, the minimum MLR for most health plans is actually 85% (and most come in significantly above that for competitive reasons). And due to the MLR, health plans actually have a perverse incentive to approve more claims because 15% of a large number is more than 15% of a small number. This is one of the many reasons why total healthcare costs have continued to grow faster than inflation.
First of all, I used 80% as an example, and it is the number for individual and small-group plans which are very common. On the other hand, 85% is the number for large-group plans. However, many plans don't have to follow the MLR at all when they're self-insured employer plans, which are also very common.
Second, your claim about the "perverse inventive" is simply incorrect. The denominator here of the 80 or 85% is premiums, not expenses. There is never any incentive like that to approve more claims above the minimum. Your arithmetic is simply backwards here. This is not a reason for rising healthcare costs.
Third, even if health plans do come in over the legally mandated minimum --let's say it's 85% for one plan, and they come in at 88%, that's often because they're creating a buffer since it's impossible to know perfectly in advance where it will hit by the end of the year. Premiums are known and constant, expenses are unknown and variable.
The basic relationship holds true: the more medical expenses they approve (beyond the MLR when it exists), the smaller their profit margin is.
The several+ times in my life I've had to sort out billing issues, the health "insurance" agents have been helpful and friendly, stating what bills should be in no uncertain terms, even offering to conference call with billing departments to get things resolved, etc... Meanwhile provider billing departments routinely try to defraud me, even going so far as to bully me to pay those fraudulent amounts, don't follow up on things (eg filing claims) that are their responsibility and that they've said they will take care of, and generally make their problems into my problems.
This certainly isn't a defense of health "insurance" companies though! I just think they're better modeled as Lovecraftian horrors animated by paperwork and compelling the creation of ever more paperwork to feed on, rather than money-grubbing cheapskates as the pop-political narrative goes. And the approaches for fixing one are much different than the approaches for fixing the other.
You're missing a very, very, very important piece here.
Which is that the lowest price of all is to deny treatment entirely.
They are not on your team, they are the opposite team. Their revenue is basically fixed, at the level of your premiums. But the more health care they pay for you to receive, the less profit they make. That's just arithmetic.
This is why there are so many horror stories of people being denied necessary treatment, or having to fight for months and years to get their treatment actually paid for. Insurance providers are incentivized to do their absolute best at taking your money and then not paying for care, through every sort of technicality and "mistake" and arbitrary judgment and limit they can come up with.