From Dorm Room Pizzas to Billion-Dollar Health Insurance Companies

Send us a text

Ever wonder why healthcare costs keep climbing despite supposed regulations? The answer lies in a surprising insight I gained from running a pizza business in my college dorm room.

At Cornell College, my friends and I sold $2 frozen pizzas for $5 (eventually $8) – a 75% profit margin we could maintain solely because we had no competition. This simple business lesson reveals the troubling mechanics behind our healthcare system, where major insurance companies have accumulated a staggering $371 billion in profits since 2010.

The system operates on a counterintuitive principle: while insurers face a 15% cap on underwriting profits, they make their real money by investing your premium dollars before paying claims. This creates a perverse incentive where higher healthcare costs actually benefit insurance companies. When medical expenses rise, insurers can justify collecting more premium dollars – giving them both a larger 15% profit slice and a bigger pool of money to invest.

The cold truth? Insurance companies may not mind expensive surgeries or treatments because these costs justify premium increases the following year. Every premium dollar increase means more investment capital and higher profits for them, but higher costs for you and your employees.

For businesses with 100+ employees, there's hope. You can break free from this cycle by choosing partners with incentives aligned with controlling costs while delivering quality care. Stop doing what's always been done with bad partners who profit from your rising healthcare expenses. Take control of your healthcare strategy and choose a better path forward.

Music by Alex Lambert.

Contact Justin via text 740-525-5259 or via email [email protected]

I welcome the opportunity to hear your feedback from this episode!

Thanks again to my musically gifted friend Alex Lambert for the music. Also thanks to Kevin Asehan for the edits.