Study Reveals UnitedHealth's Profit Margins Four Times What It Claimed [pdf]

> Conventional accounting measures portray large health insurers such as UnitedHealth Group (UHG) as earning relatively low profit margins because they treat premium dollars that are subsequently paid out in medical claims as revenue. However, these medical claims are pass-through costs, not income retained by the insurer.

I don't understand this claim. Doesn't every business have costs to make its goods and services, and revenue when those are sold? A grocery store sells food and uses the money to buy more food, pay its employees, reinvest etc, and the profit leftover goes to the owners. An insurance company sells policies and similarly uses the money to pay claims, pay employees, reinvest, and profit. Why is the insurance company's sales revenue pass-through and the grocery store's sales revenue not?

Update: the replies so far all seem very superficial. Yes, I know that insurance is not exactly the same as grocery stores. This does not explain why they should suddenly be treated differently from an accounting perspective despite what everyone else before this moment has done.

Medicine is big business. Insurance exists because people are betting against their health. Profits this high indicate insurance is REALLY GOOD at getting people to bet against themselves.

It's hard for me to trust this pdf when there's literally a typo directly under the author's name: "analyitcs"

@getnormality Two main differences:

1) medical loss ratio rules mean insurers are expected/required to pass a certain percent of premium on as payment for medical services, in a way that a grocery store is not required

2) insurer is selling you a contract that they will pay your medical bills if you have any - they are NOT retailing you medical services

3)

I don't understand.

Brokers quite correctly do not count the value of the shares because they never actually see it. But that's not the way insurance works--while dollars flow in and dollars flow out they are not remotely the same dollars. This feels like someone is trying to lie with statistics.

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So many die every year because of the US' dogshit system -- and it's never enough.