EP482: 3 Surprising Ways Carriers Make Lots of Money—What Do Plan Sponsors and Clinical Organizations Really Need to Know? With Preston Alexander
Release Date: 07/24/2025
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info_outlineIn this episode, Stacey Richter discusses 'Three Surprising Ways Carriers Make Lots of Money' with Preston Alexander. The episode highlights how carriers leverage financial strategies—like using premium dollars as float, intracompany eliminations, and upcoding in Medicare Advantage—to enhance their profits.
The discussion emphasizes the importance for plan sponsors and policymakers to understand these tactics to better manage healthcare costs. Alexander advises collaborating with unbiased consultants who are experts in health plan design to navigate these complex financial dynamics effectively.
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08:29 What is float, and why is it a surprising way that carriers make money?
14:01 Summer Shorts on pharma rebates with Ann Lewandowski.
14:41 Why carriers really do denials and delays of payouts.
17:34 What are intercompany eliminations, and how do they make carriers more money?
22:21 How do carrier-owned pharmacies play into this?
23:19 How are carriers creating profit off of Medicare Advantage and Medicaid Advantage markets?
27:18 How the fee-for-service price increases affect Medicare prices.
28:12 Why aren’t large insurance carriers motivated to make costs go down?
32:42 What is a potential way forward to fix the rising cost of healthcare?
33:36 As a plan sponsor, how do you address carriers making profit on your float?
35:07 EP478 with Andreas Mang and Jon Camire.
36:34 “Our economy’s not gonna survive healthcare.”