Relentless Health Value EP482: 3 Surprising Ways Carriers Make Lots of Money—What Do Plan Sponsors and Clinical Organizations Really Need to Know? With Preston Alexander
20 snips
Jul 24, 2025 Preston Alexander, Founder and CEO of Forward Slash / Health, specializes in helping independent physician practices thrive financially. He reveals how healthcare carriers generate unexpected revenue through complex strategies, like leveraging pre-collected premiums for investment. The conversation delves into the ethical implications of profit maximization at the cost of public health and emphasizes the need for employers to engage specialized consultants for transparent health plan development. Proactive measures are vital to tackle rising healthcare costs affecting businesses and employees alike.
AI Snips
Chapters
Transcript
Episode notes
Carriers Profit From Premium Float
- Carriers use premiums as "float," money they hold before paying claims to earn investment income.
- Delaying care and denials extend the float duration, increasing carriers' profits significantly.
Profit Through Intercompany Transactions
- Vertical integration lets carriers pay inflated rates to their own provider arms, boosting apparent medical losses.
- This accounting shuffle enables carriers to increase profits while appearing to meet medical loss ratio limits.
Medicare Advantage Risk Score Game
- Medicare Advantage payments depend on risk scores, which carriers can manipulate to increase upfront payments.
- Carriers benefit financially from higher costs, incentivizing delayed care and higher premiums, despite capitated payments.