Funny events in anti-woke world

[Phoenixmgs]

No, because they still spent the $800k on care. The rebates are a separate stream of revenue, not subject to 80/20. Like how if the same umbrella owns the insurer and PBM there's an incentive for the insurer to use that PBM and for the PBM to overcharge the insurer because the PBM isn't subject to 80/20.

The whole point in both cases is to have money that's actually profit but isn't on the 20 side of the 80/20 rule.

I understand that, but IF that's what they can do, their profits would be far larger.

 

[Silvanus]

I don't think that's how that works. If they got $1 million from premiums, $800,000 of it would have to go toward medical expenses. So if they got back $100 every time for Drug_X, that would still be part of their pool of money to spend on medical expenses. And if they were doing this, their profit margins would be freaking ridiculous. Also, why play the PBM game if they can just do that?

Why 'play the PBM game'? Because they have their own PBMs as well, scraping money from other insurance companies.

When you say "part of their pool of money for medical expenses"-- why? The 80/20 applies to money directly from premiums only, as far as I know. Add some extra steps, and its released from that obligation, like laundering.

I understand that, but IF that's what they can do, their profits would be far larger.

Let's see your maths on that.