This three has taken an interesting turn. Lets looks at a few things…
Under the ACA there are thresholds of how much $ can be spent on marketing/admin/salary etc versus what needs to spent on claims. Excess margins are returned to the policy holders. On average, the break out is roughly 85% spent paying for health care, 10% on admin and 5% on margin. Of the 10%, I can assure you executive pay is a minuscule amount (and thats a high estimate). We've looked at it and its not even a rounding error for our leadership. Im not crazy about excess executive compensation (I'm probably am more anti the egregious Wall Street packages than the $2M CEO salary) but it has NOTHING to do with increased medical trend. The enemy is increasing demand for care and the increasing costs of care. Insurers price for this and try to control it. They don't cause it. Insurers have their sins but this isn't it.
Now, a funny thing happened with the ACA. While there are caps on your medical loss ratio, the rules are so complex administrative costs have begun to increase. I can't underscore just how complex these rules are. And the rules are also somewhat crazy. Here's on example I've referenced before…
Exchnage buyers who don't pay premiums get one month free. If I buy in Jan, pay Feb and don't pay March, all my claims paid in March HAVE to be covered by the insurer. This has a MUCH bigger impact on trend than salaries. Its not even close. In fact, the cost of issuing the federally mandated delinquency notices have more impact. This is the ACA at work.
Now, businesses have marketing spend since you know, they are trying to sell products. Not sure what the beef is there (especially given the rules noted above). But lets look at how much HHS spent this year to get people enrolled on the exchanges (and they wanted to spend a ton more). And remember brokers actually had to help people get enrolled based on its incredible complexity. The feds paid brokers $0 to do this. Are these not acceptable "marketing" expenses? They seem so to me.
As an aside, the spike in advertising from insurers was a 100% a result of the ACA as plans rebranded themselves in prep of the exchanges. All of the big national carriers went through a significant transformation but thats a post for another day.
Last, we need to also realize administrative costs aren't a bad thing. The value insurers bring is to control trend, find waste/fraud thats rampant and also develop innovative programs to lower costs. Outcome based reimbursement and quality profiling were an innovation from the private sector. Many of the case management programs that control disease (and costs) are costly but have positive ROIs. There are countless medicare demonstration projects i pact to control costs. Out own internal ROI translates to roughly a 5/1 return. Dinsingg the value of payers is just ignorant of how the HC industry works.
I will agree with RJ that selling across state lines is a red herring. However, is reasoning is 100% wrong. If you talk tot he M&A guys, they will all tell you the OPPOSITE is true. There's no need for consolidation when selling nationally. Nationsla nut regional players to get into local markets. They won't need to do that if we had this.
Single payer has its mrot. It can lower the cost per unit (i.e. paying doics LESS) and limiting the # of units (rationing of care). Medicare does a horrible job of the later thus it has problems (amongst a how tof totters). The tradeoff of single payer (quality debate aside) are pretty clear. That being said, the US system (and culture) just couldn't accept a true. The state of of our culture and our delivery system today would make it a disinter IMHO.
BTW, I've been accused of being a shill so in full disclosure, I work in the industry, but am not compensated more than your average MBA grad with 20 yrs experience. I work for a not for profit, not that that matters.