[lotsofpulp]

It would depend on the cost of healthcare being delivered to those customers.

Considering that an out of pocket maximum did not exist prior to affordable care act, and insurers were allowed to deny people with pre existing conditions, I would expect drastically higher spending on new insureds because they would finally start getting healthcare.

Now the insurance company has to pay the hundreds of thousands and millions per NICU/hemophiliacs/cancer patients etc, so why wouldn’t their expenses go drastically higher?

[thrown_22]

That's profit, not revenue.

I'm asking why their revenue for increased exponentially for having 10% more clients.

[lotsofpulp]

That is not profit. If an insurance business picks up 10% more clients that cost 5,000% higher expenses, they cannot just increase premiums 10%. They have to increase premiums a lot more.

Not to mention that the ACA forced insurers to subsidize old people from the young (maximum age rating factor), health to sick (can only price based on age, location, and tobacco status), and imposed out of pocket maximums. All of these mean the insurance company is spending a lot more after ACA than before ACA, and all of that had to be recouped as revenue from premiums, otherwise you have bankruptcy.

Also, all the US health insurance company financials are public. You can see their profit margin is a steady ~5% for over a decade. They are spending $95 for every $100 in premiums they take in.

[thrown_22]

So why then are they also more profitable?

[lotsofpulp]

They are not. UHG is punching slightly above average, but they have considerable non insurance operations.

> Also, all the US health insurance company financials are public. You can see their profit margin is a steady ~5% for over a decade.

https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g...

https://www.macrotrends.net/stocks/charts/ELV/elevance-healt...

https://www.macrotrends.net/stocks/charts/CVS/cvs-health/pro...

https://www.macrotrends.net/stocks/charts/CI/cigna/profit-ma...

https://www.macrotrends.net/stocks/charts/HUM/humana/profit-...

https://www.macrotrends.net/stocks/charts/CNC/centene/profit...

https://www.macrotrends.net/stocks/charts/MOH/molina-healthc...

Going back to testfoobar’s comment comparing tech companies and health insurers, I do not think any investors will be impressed by health insurance companies’ low single digit profit margins compared to tech’s 20%+ profit margins.