[OnlineCourage]

No, the ACA maxes out total profit payers can take home at 15% for large groups and 20% for small groups respectively throughout a year, so it's not a commission based system like you are imagining. There are severe penalties for improper billing including prison. No one likes insurance, but HMOs are not at fault here, it was due to overcomplexity and lack of regulation within private practice.

[qeternity]

You're missing the point. It doesn't need to be commission based, it becomes so implicitly. If my allowable profit is a function of how much I pay out, then I have an incentive to make prices as high as possible, just like in a commission based system.

[OnlineCourage]

To anyone reading, please do not listen to this commenter, they are making large assumptions about an industry they do not understand. Thanks.

[dang]

The trouble with a comment like this is that it doesn't contain any real information. If you know more, please share some of what you know so the rest of us can learn something.

https://news.ycombinator.com/newsguidelines.html

[shantly]

So higher medical spending does not let them make greater profits?

[OnlineCourage]

No, because there are extreme penalties and disincentives to overbill. Also, payers are not strictly payers in the US, they are what is known as HMOs, they are incentivized to bring healthcare costs down or at least slow the rise.

Healthcare costs will inevitably rise in the US however, as labor is scarce, practioners are scarce, people are increasingly unhealthy and older...we are in for a massive healthcare cost spike due to economic conditions and blaming HMOs is emotional and politician inspired at best. Its like blaming insurance companies for a rise in car crashes.

[shantly]

Ah, pretty sure I've never been under nor been close to anyone under an HMO so I'm not familiar with how those operate.

Given how common stuff like in TFA is, plus so much more on smaller and less eye-popping scales, and seeming endless ability for providers to say "oops our bad now it's fixed" when caught and avoid punishment, I'm skeptical that these extreme penalties kick in often enough to counteract incentives to let prices creep higher.

[EDIT] from my personal experience, it's mostly up to individuals to burn tons of time investigating irregularities and escalate them to elected officials & regulators when insurers or providers dig in their heels, to which the officials' and regulators' response is usually a strongly worded letter that makes your particular problem go away, with no follow up, presumably because pursuing it will be difficult, expensive, and unlikely to yield results that help anyone with their next election or promotion. That's kinda how it looks like this one's going, in fact, though maybe there'll be some regulatory follow-up with something resembling teeth, since it got press. It's like the Twitter-complaint model of customer support, but way worse.