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Thread: FACT CHECK: Health insurer profits not so fat

  1. #101
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    Re: FACT CHECK: Health insurer profits not so fat

    Quote Originally Posted by apdst View Post
    Depends on the volume of sales. If that company were the only one, they might look more at profit margin and less at volume, possibly making less money, because they're selling less product. You understand the difference between profit and profit margin, right?
    Think about it this way: Assume there was only one OTR freight company in the US, because not only was it more competitive than its peers, it bought them out. (highly unlikely assumption)

    Would they not be able to charge a price of their choice without having to compete with other companies (in an attempt to pull revenue)?

    No, it doesn't. It can't, or we'll have a depression. NO company can operate with a zero profit, unless, as I stated before, that company is designed not to make a profit, to begin with.
    How about long distance telephone companies? Or many factions of US automobile companies? Or corn . Yes corn is a perfectly competitive market where economic profits equal zero (given current market conditions). They are subsidized entirely. As a national security matter, it would be a terrible move to end domestic farming, even though it is very much possible to obtain it in trade (cheaper too!).

    This is the fate of all industries that we know of. The most recent emergence is the use of paper to read off of.

    Covering the safe amount of burning houses is maximizing profit margins. Point: if all companies have a safe amount of burning houses, all companies can offer lower prices.
    Two things are likely to emerge from this: 1.) prices will fall very close to the level of cost. 2.) Horizontal integration. The number of firms will be greatly reduced, allowing for positive price trends.

    That's why they call business a, "risk"...LOL!!!! The government can set regulations, so that every company has to insure "X" amount of burning houses, based on the number of burning houses from the previous year, so the market remains stable.
    You're a free market guy; government micromanagement of industry is never a good idea in my book. Imagine a government agency telling you how much tonnage you could load/haul, to keep prices "fair to the people". That would ****ing blow IMHO.

    If the amount of burning houses goes up, the rates will go up, just like when prices go up as the price of gas goes up. The market is a bitch, ain't it??
    The number of burning houses is based on probability attained from data of previous payouts across an allotted pool. No insurance company ever makes it a business practice to ensure something equivalent to the proverbial "burning house". Although i have no doubt a policy can be drawn up if someone is willing to pay the right price, it does not seem like a good idea to me. Of course i could be wrong.

    Now, in my situation, trailers are different. I can rent trailers, however, it isn't cost effective, unless I knowingly have thework coming up to justify the rentals. I've done it in the past, but I did because I had inside information of a sure thing. I still took a risk, but it turned out to be worth it in all those instances.
    The first real job was working for an OTR freight company refurbishing piece of **** transcrafts. I eventually lost it to a combination of leased aluminum trailers, but why did i care, i was only 18 then.
    Last edited by Kushinator; 10-26-09 at 11:08 PM.
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  2. #102
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    Re: FACT CHECK: Health insurer profits not so fat

    Quote Originally Posted by apdst View Post
    What I'm saying, is that by expanding competition, you're spreading the risk over many companies and not just a few. With moe insurance companies operating in the industry, each company could see a higher profit margin, with lower risk.

    As an example, I'll use round numbers.

    Say there are ten health insurance companies operating in a state. There are 1,000 insurees that will obviously cost those companies money, because their health is so bad, or they have a pre-existing condition, etc. That means that each company would have to take on 100 new clients that are guaranteed to be a loss.

    Now, if there were 100 companies operating in a state, that would mean their would be only 10 guaranteed loss claims for each company. Two things would happen: 1) the profit margins would go up, and the loss would be easier to weather and 2) The insurance companies would be more likeley to sign a client knowing that that client is going to b a guaranteed loss.

    it's simple loss vs. profit business strategy. When running a business and you take a risk, you have to ask yourself, "how is the loss going to affect the company? Will it be a minor dip in profits? Will we survive the loss? I don't care what kind of business you're in, you have to ask yourself these questions, at some point.
    There is an obvious flaw in your analysis. You increase the amount of companies assuming the risk without increasing anything else.
    If 100 companies suddenly flood the market where 10 existed before, each company is now only getting 1% of the market share previously garnered by the companies. Pretty ****ty huh.
    So maybe your theory is that the number of insured will increase because of the decreased premiums. Sound concept, however it will also bring more guaranteed losses, and a more risky pool of people because they haven't had insurance in the past so are more likely to have untreated and/or unknown problems
    Increasing competition across state lines is a good idea, your analysis is just incorrect.

    Quote Originally Posted by apdst View Post
    I'll give a personal example. yesterday, I got a call from a customer that needed two trucks to go to Alberta, Canada. The loads paid $19,000, together. A $19,000 week is a helluva week, especially in this economy. It's snowing in that part of the country right now. None of my drivers have experience driving in the snow. I had to ask myself if it was worth the risk of losing two trucks and two trailers to gross $19,000. replacement cost for each truck is about $30,000 and each trailer is around $15,000. I'll net about $10,000 dollars after expenses. Is it worth it to put my drivers and $90,000 worth of equipment at a heightened risk to make $10,000, when I can keep them here, conduting normal operations and clear $5,000? I decided to go for the $5,000 and not put my men and equipment into undue risk, because I can't survive the loss of $90,000 worth of equipment.
    What the heck are you hauling that pays $9500??
    Also you should take into account that the trucks are insured so you actual loss would only be the amount of the deductible not the entire $90,000.
    Last edited by Phoenix; 10-26-09 at 11:11 PM.
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    Re: FACT CHECK: Health insurer profits not so fat

    Quote Originally Posted by apdst View Post
    I haul a different kind of freight, so I don't actually compete with JB Hunt. In my segment of the industry, I can offer specialized equipment and services that JB Hunt can't/won't offer. Ryder Truck Lines has branched off into my world and after 8 months, are looking for a way out.
    Cool and I wish you the best of luck with it, seriously.

    Who knows maybe someday you might be the next JB Hunt.

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    Re: FACT CHECK: Health insurer profits not so fat

    Quote Originally Posted by Phoenix View Post
    What the heck are you hauling that pays $9500??
    Also you should take into account that the trucks are insured so you actual loss would only be the amount of the deductible not the entire $90,000.
    I could be precious antiques. I've known people that have paid a lot more than that to have one piece hauled just a few miles.

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    Re: FACT CHECK: Health insurer profits not so fat

    Thatís why I haul heavy machinery/oversize loads, I donít have to compete with JB and the great Pumpkin (Schneider).
    The haggardness of poverty is everywhere seen contrasted with the sleekness of wealth, the exhorted labor of some compensating for the idleness of others, wretched hovels by the side of stately colonnades, the rags of indigence blended with the ensigns of opulence; in a word, the most useless profusion in the midst of the most urgent wants.Jean-Baptiste Say

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    Re: FACT CHECK: Health insurer profits not so fat

    Quote Originally Posted by GoldenBoy
    Therefore competition is beneficial more so for the consumer than the producer.
    Quote Originally Posted by apdst View Post
    It's beneficial to both.
    No, It's not. Competition ALWAYS benefits the consumer. It drives prices down. That decreases profits for the producer. Your concept that it decreases risk to the insurance company so it's beneficial doesn't wash because the other insurance companies would also be taking an equivalent market share of the good profitable consumers.
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    Re: FACT CHECK: Health insurer profits not so fat

    Quote Originally Posted by Goldenboy219 View Post
    Think about it this way: Assume there was only one OTR freight company in the US, because not only was it more competitive than its peers, it bought them out. (highly unlikely assumption)

    Would they not be able to charge a price of their choice without having to compete with other companies (in an attempt to pull revenue)?
    There is error in your example, because anti-trust laws wouldn't allow that to happen.



    How about long distance telephone companies? Or many factions of US automobile companies? Or corn . Yes corn is a perfectly competitive market where economic profits equal zero (given current market conditions). They are subsidized entirely. As a national security matter, it would be a terrible move to end domestic farming, even though it is very much possible to obtain it in trade (cheaper too!).

    This is the fate of all industries that we know of. The most recent emergence is the use of paper to read off of.
    It's all about supply and demand. If you control the supply, then you can set the price according to the demand.



    Two things are likely to emerge from this: 1.) prices will fall very close to the level of cost. 2.) Horizontal integration. The number of firms will be greatly reduced, allowing for positive price trends.
    Actually, #1 will take place, then #2 will happen shortly there afterwards.



    You're a free market guy; government micromanagement of industry is never a good idea in my book. Imagine a government agency telling you how much tonnage you could load/haul, to keep prices "fair to the people". That would ****ing blow IMHO.
    All the more reason for the government to de-regulate the health insurance industry, rather than try to take it over.



    The number of burning houses is based on probability attained from data of previous payouts across an allotted pool. No insurance company ever makes it a business practice to ensure something equivalent to the proverbial "burning house". Although i have no doubt a policy can be drawn up if someone is willing to pay the right price, it does not seem like a good idea to me. Of course i could be wrong.
    With the new competitive market, your garden variety company will be more willing to risk covering a burning house, because of their increased survivability.



    The first real job was working for an OTR freight company refurbishing piece of **** transcrafts. I eventually lost it to a combination of leased aluminum trailers, but why did i care, i was only 18 then.
    Transcrafts are crap. We found common ground!.... I'm a Fontaine guy. Reason being, I owned a 97 Fontaine flatbed in '01 sold it, that guy wrecked it, he sold it to another guy that rebuilt it, then it got burned, then I bought it for a song and rebuilt it and she's still going strong.

    I have a Fontaine 50 ton RGN that can move some big ****ing iron. I love it!
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: FACT CHECK: Health insurer profits not so fat

    Quote Originally Posted by donc View Post
    Thatís why I haul heavy machinery/oversize loads, I donít have to compete with JB and the great Pumpkin (Schneider).
    You ain't man enough to be a heavy hauler, so don't even try it. You're probably a radio Rambo, looking for commercial in the truck stop, out of your pick-up truck.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

  9. #109
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    Re: FACT CHECK: Health insurer profits not so fat

    Quote Originally Posted by Goldenboy219 View Post
    You're a free market guy; government micromanagement of industry is never a good idea in my book. Imagine a government agency telling you how much tonnage you could load/haul, to keep prices "fair to the people". That would ****ing blow IMHO.
    They do., I think it's like 80,000 with truck and trailer.
    Not relevant but I couldn't resist.
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    Re: FACT CHECK: Health insurer profits not so fat

    Quote Originally Posted by apdst View Post
    You ain't man enough to be a heavy hauler, so don't even try it. You're probably a radio Rambo, looking for commercial in the truck stop, out of your pick-up truck.
    Hey dude, your talking the one and only ďTREEDANCERĒ heard world wide.
    The haggardness of poverty is everywhere seen contrasted with the sleekness of wealth, the exhorted labor of some compensating for the idleness of others, wretched hovels by the side of stately colonnades, the rags of indigence blended with the ensigns of opulence; in a word, the most useless profusion in the midst of the most urgent wants.Jean-Baptiste Say

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