Some might say that my words in the last chapter were too harsh, too unkind to all the healthcare providers and administrators in the hospitals across the United States. Perhaps. Afterall, one could argue that they have been forced to consolidate and grow in order to stay on an even playing field with the ever mushrooming size of America’s behemoth insurance companies. Common business sense dictates that jumbo sized payors and shrimpy providers would not be a recipe for high reimbursements for services rendered. And indeed, America’s insurance companies have gobbled each other up with such famished hunger that only five real players still exist on the field: Aetna, Humana, United, Anthem, and Cigna. Five companies to insure 400 million Americans. And even these five came within inches of consolidating down into just 3! (the deal was eventually blocked by the Justice Department’s Antitrust enforcers).
Much like the hospitals, perhaps even more surprisingly so, these “Big Five” have come through the entire Obamacare ordeal without a scratch. In fact, as we will see in the coming discussion, they have only grown, in every sense of the word. For most people, this will simply translate to long phone waits, huge deductibles with limited benefits, and denied insurance claims. But because you have chosen to invest time and money in this book, the Big Five’s stranglehold on the American economy means something entirely different for you. You see, these callous, cold and inhuman insurance companies are not owned by secret committees of faceless capitalists; rather they are owned by thousands of regular joe’s who are educated enough to make sure that they get their cut of the bonanza. We are going to make sure that you get your piece of the action, as well.
One of the most damning issues facing average consumers is that they probably don’t understand the private insurance markets very well to begin with. After all, we constantly shop in grocery stores because we need food, we often buy shoes because our feet need protection, and we know which video streaming service to sign up for because we like our entertainment every night. But health insurance is the one thing we all buy hoping that we will never need to use. And, in fact, many Americans don’t use their insurance very often. So, when something suddenly goes very wrong with our bodies, we are often shocked not just at the frailty of our human form, but also at the bizarre pitfalls of the American Health Insurance System. If you had never grocery shopped in your life, and one night you woke up at 2AM famished, going to the grocery store might be a startling experience indeed. Especially if you were suffering from pain and fear.
In order to be good investors, we need to understand at least the basics of the industry. After we understand the basics, we’ll talk about the fun stuff; how to make mountains of money partnering with the industry that everyone loves to hate.