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There are three topics of vital importance to nearly everyone that at the same time are near the top of the list to be criticized and misunderstood by nearly everyone. (taxes are at the top).
Health insurance
Social Security
Electric and Gas utilities
I spent by whole career working for a utility and at the same time designing and managing health insurance plans. I study Social Security and may be one of five Americans in the US who reads the annual trustee report. 🤑
What insurance companies do, why they do it and how it all impacts premiums is widely misunderstood. How they earn profits, how much they earn and how profits impact premiums is a wasteland of misinformation. Many (most) people simply miss the direct connection between premiums and the use of health care. Lower deductibles and co-payments, expanded coverage and paying every claim without question drive up premiums-company profits are not a major factor.
Insurance companies are limited by law how much of premium revenue they can retain (15-20%). Premiums are reviewed and approved by state and federal agencies. Net profit margins are low, generally in the 3-5% range, lower than regulated utilities. Profits are not driven by individual premiums, but by growing the number of policies in effect. In addition, in some cases the company’s total profits include other lines of business, international business and in many cases contracted fees for processing claims for self-insured employers and even the government.
Social Security is often viewed as a retirement program while, but it is much more. Many people claim they paid for the benefits they will collect – they didn’t. If that was the case, benefits would stop when they reached the value of taxes paid (typically within six years) and no one who didn’t pay taxes would receive any benefit- but they do.
Many think Congress misused the trust and hence their payroll taxes – it didn’t. Have you heard that millions of deceased people are actually receiving benefits and that if those illegally receiving benefits were removed, the trust would be in good shape- nope. The trust needs more revenue and/or less spending.
Some people believe Social Security is a scam because “lots of people” die before they collect any benefits – actually that is few people and I’m pretty sure the actuaries take that into account.
Others say the trust fund is a “surplus” but now it is being used to pay current benefits. In fact, the 75-year accrued liability is $25 trillion while the infinite liability – assuming the program continues for all current citizens is $75 trillion according the Trustee report. The trust currently holds about $2.7 trillion which is declining by roughly $5.5 billion per month.
Utility bills go up based on the cost of generating electricity which is largely dependent on fuel prices such as natural gas which is a global commodity. Most utilities do not make money on the generation of electricity. Generation is a competitive commodity. That is a pass through part of your bill.
Utilities make money on the distribution of power and many utilities are investing heavily on rebuilding, maintaining and expanding their systems for reliability and because demand is increasing. Utility earnings are regulated and rates approved in advance. In some cases the startup costs for clean energy add to bills. That cost/benefit debate will go in for a long time. And of course, our bill increases when we expand our use of electricity to maintain our lifestyle without even realizing it.
There is more to all this than I mentioned, but nevertheless, the misinformation is widespread and in some cases simply won’t go away even when presented with the facts.
Regarding healthcare insurance, isn’t the “issue” not just the profits but also the expenses incurred to earn those profits? Surely, this would be a much larger number and would be avoided if insurance companies weren’t involved in our healthcare system.
The retention is what you refer to. Under the law that is limited. All premiums must be justified and approved at the state or federal level. Too low premiums will result in playing catch up in the following year.
Medicare employs insurance companies and others to review and pay claims. No matter what that has to be done, but Medicare is far more liberal in the process and more subject to fraud.
Higher profits are not the result of higher premiums, but of growing sales-more customers. The net profit margins for major health insurers are relatively low, more aligned with regulated utilities. In addition, in some cases insurer gross revenue is from other lines of business and international businesses.
Most of the politically driven rhetoric about health care and health insurance is bunk.
About half of all Americas have employer funded health insurance and 60% of those are in self-insured plans which means no insurance involved no risk or profit for insurers, they just pay claims. Those plans face the same cost issues as do insured plans.
You cannot have a system or non-system with many different payment processes and expect it to be efficient from any perspective. It’s like a balloon, squeeze one side the other pops out larger. That’s what happens between Medicare, Medicaid and private insurance in any form. Costs are just shifted around. Our health system could not function if all fees were based on Medicaid or even current Medicare allowances. In many cases they don’t cover costs.
When I worked for a utility – admittedly almost 30 years ago – the CEO’s performance bonus was based on several factors, one of which was the overall percentage of continuous service. As a result special attention was paid to power plant outages and the emergency outage personnel staffing levels. Happily, the same factor was a determinant for employee profit sharing contributions, too.
Reliability is the name of the game for utilities. Many people want the lights on, but then complain at what it costs to maximize it.
In general I am not in disagreement with the general thrust of your forum post.
However, for the “Utility Bill” item, at least in my state (Connecticut), there are some monthly “fees” built in that are really hidden taxes on people who are actually paying for electricity. These fees are called “Public Benefits” charges. On average, the Public Benefits charge typically makes up between 20% and 30% of a standard Eversource residential bill.
The “Public Benefits” charge in a CT Eversource utility bill is a collection of costs for state-mandated programs that the utility is required by law to fund. Importantly, Eversource does not keep this money as profit; they collect it from you and pass it through to the state or specific programs.
These programs include:
– Hardship Programs: This includes the “Systems Benefit Charge,” which funds assistance for low-income residents, prevents shutoffs during winter months, and supports programs like Operation Fuel.
– Energy Efficiency: Funds “Energize CT” initiatives, such as home energy audits and rebates for energy-efficient appliances.
– Renewable Energy: Supports the CT Green Bank and provides incentives for residential solar and electric vehicle (EV) charging.
Thus, paying electric customers are funding programs decided on by the state government and not for electricity itself.
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This is the kind of financial manipulation by our particular state government that I judge to be deceitful: Using our utility bill to pay for governmental programs that should be debated in a more fully transparent way.
https://ctmirror.org/2025/05/19/ct-public-benefits-charge/
How would this be “deceitful” if these programs are voted into being by the elected legislature? Were these measures not made available for public comment and publicized by the news media before being voted in? Were the programs passed secretly or over majority public opposition?
Here is just one example of what I mean by deceitful:
https://yankeeinstitute.org/2026/02/26/connecticut-wants-to-ban-your-leaf-blower-and-use-your-electric-bill-to-pay-for-it/
Energy efficiency and green initiatives are really avoided costs – a cheap way to “expand” capacity in lieu of building new plants/generation and transmission, which are expensive and time consuming (may need public utility commission approval).
As for helping low income households (including the disabled and elderly) is probably more efficient than going through a budget appropriations process.
That’s what I was alluding to when I mentioned start up costs for clean energy.
Social Security: The trust currently holds about $2.7 trillion which is declining by roughly $5.5 billion per month.
2.7 trillion / 5.5 billion per month = 490 months = about 40 years. But I thought the trust fund was estimated to be depleted around 2034 (or more recent estimate, 2032). That’s way sooner. What am I overlooking? Thanks.
The $5.5 billion is steadily increasing and the revenue declining, including the interest income as bonds are redeemed. Don’t forget in addition, future COLAs keeping adding to expenses, those are included in actuarial projections. If there is a spike in inflation or other changes in the economy such as may accelerate retirements, the insolvency date will be adjusted as it is regularly.
In addition, the cut in benefits applies to retirement benefits only, payout amounts I mentioned include disability benefits which come from a separate trust accounting wise. If the funds were theoretically combined, the insolvency date is extended and the disability fund is depleted sooner.
Nothing is static.
I noticed that myself, could it be that the fund doesn’t deplete linearly? Maybe it will deplete faster as more boomers retire and the worker-to-beneficiary ratio worsens?
Maybe nonlinear: good point!
Maybe someone can find and post a set of trust fund balances starting before the Boomer retirement surge, so we can do an exponential regression?
I’m a retired Boomer and way, way too lazy to do all that work.
🤪
Well, I’m a retired math teacher Boomer, so if someone can get me the numbers, I’m happy to fire up the ol’ TI-84 calculator, or some online app such as Wolfram Alpha, or even Excel (but don’t tell RDQ 🙂).
Geez! You had a TI-84?!? Man, you were living large! If I remember correctly, the TI-55 was the first programmable calculator they offered. I thought I hit the lottery when I got that one.
TI-59 with the little magnetic card strips to store programs? Yep, I had one for myself back in the late ’70s. Also an HP with its infamous RPN (Reverse Polish Notation). But for teaching the school went with TI, so TI-81, 82, 83, finally 84 in various iterations (84 Plus CE my favorite, the one I still have). We tried the TI-Nspire but most of us felt it was more trouble (steeper learning curve) than it was worth; also, the College Board disallowed use of the Nspire CAS models on the SAT, so that was a deal-breaker.
That wouldn’t help anyway. What is everyone trying to figure out? 😎
If the 5.5 billion per month decline stayed steady, then the SS trust fund would be depleted in about 40 years. As you explained, though, the decline is accelerating, so it will happen sooner — much sooner, 2032, say the experts.
I’d like to see the trust fund balances starting before the Boomer retirement surge so I can see for myself whether the predicted depletion date 2032 seems on target.
To do that, with an accelerating decline an exponential or other nonlinear regression could be appropriate for predicting the depletion date.
This is just me liking numbers and details…
I’ll leave that up to the actuaries, that’s their job.