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Hahahaha.You’ve been fed a line of bullshit.First, there is no “inconvenience”. I can go to literally any clinic, doctor, or hospital in the country and all I need to do is to show them my health card:Second, about those taxes: healthcare expenditures are mostly covered by various forms of income taxes, which means that you pay based on what you earn. If you’re a struggling new grad, you pay very little. If you are a rich old fart, you pay more. In both cases, overwhelmingly, people think that it is “worth it”. (And by the way? Just as an aside? In Canada, our taxes are actually lower than your taxes + health insurance + copays.)Here’s a great short video (by an American doctor) which explains the Canadian healthcare system really well:This article is well worth reading: https://www.washingtonpost.com/outlook/2020/08/06/health-insurance-canada-lie/?arc404=trueHere’s the text:In my prior life as an insurance executive, it was my job to deceive Americans about their health care. I misled people to protect profits. In fact, one of my major objectives, as a corporate propagandist, was to do my part to “enhance shareholder value.” That work contributed directly to a climate in which fewer people are insured, which has shaped our nation’s struggle against the coronavirus, a condition that we can fight only if everyone is willing and able to get medical treatment. Had spokesmen like me not been paid to obscure important truths about the differences between the U.S. and Canadian health-care systems, tens of thousands of Americans who have died during the pandemic might still be alive.In 2007, I was working as vice president of corporate communications for Cigna. That summer, Michael Moore was preparing to release his latest documentary, “Sicko,” contrasting American health care with that in other rich countries. (Naturally, we looked terrible.) I spent months meeting secretly with my counterparts at other big insurers to plot our assault on the film, which contained many anecdotes about patients who had been denied coverage for important treatments. One example was 3-year-old Annette Noe. When her parents asked Cigna to pay for two cochlear implants that would allow her to hear, we agreed to cover only one.Clearly my colleagues and I would need a robust defense. On a task force for the industry’s biggest trade association, America’s Health Insurance Plans (AHIP), we talked about how we might make health-care systems in Canada, France, Britain and even Cuba look just as bad as ours. We enlisted APCO Worldwide, a giant PR firm. Agents there worked with AHIP to put together a binder of laminated talking points for company flacks like me to use in news releases and statements to reporters.Here’s an example from one AHIP brief in the binder: “A May 2004 poll found that 87% of Canada’s business leaders would support seeking health care outside the government system if they had a pressing medical concern.” The source was a 2004 book by Sally Pipes, president of the industry-supported Pacific Research Institute, titled “Miracle Cure: How to Solve America’s Health Care Crisis and Why Canada Isn’t the Answer.” Another bullet point, from the same book, quoted the CEO of the Canadian Association of Radiologists as saying that “the radiology equipment in Canada is so bad that ‘without immediate action radiologists will no longer be able to guarantee the reliability and quality of examinations.’ ”Much of this runs against the experience of many Americans, especially the millions who take advantage of low pharmaceutical prices in Canada to meet their prescription needs. But there were more specific reasons to be skeptical of those claims. We didn’t know, for example, who conducted that 2004 survey or anything about the sample size or methodology — or even what criteria were used to determine who qualified as a “business leader.” We didn’t know if the assertion about imaging equipment was based on reliable data or was an opinion. You could easily turn up comparable complaints about outdated equipment at U.S. hospitals.(Contacted by The Washington Post, an AHIP spokesman said this perspective was “from the pre-ACA past. We are future focused by building on what works and fixing what doesn’t.” He added that the organization “believes everyone deserves affordable, high-quality coverage and care — regardless of health status, income, or pre-existing conditions.” An APCO Worldwide spokesperson told The Post that the company “has been involved in supporting our clients with the evolution of the health care system. We are proud of our work.” Cigna did not respond to requests for comment.)Nevertheless, I spent much of that year as an industry spokesman, my last after 20 years in the business, spreading AHIP’s “information” to journalists and lawmakers to create the impression that our health-care system was far superior to Canada’s, which we wanted people to believe was on the verge of collapse. The campaign worked. Stories began to appear in the press that cast the Canadian system in a negative light. And when Democrats began writing what would become the Affordable Care Act in early 2009, they gave no serious consideration to a publicly financed system like Canada’s. We succeeded so wildly at defining that idea as radical that Sen. Max Baucus (D-Mont.), then chair of the Senate Finance Committee, had single-payer supporters ejected from a hearing.Today, the respective responses of Canada and the United States to the coronavirus pandemic prove just how false the ideas I helped spread were. There are more than three times as many coronavirus infections per capita in the United States, and the mortality rate is twice the rate in Canada. And although we now test more people per capita, our northern neighbor had much earlier successes with testing, which helped make a difference throughout the pandemic.The most effective myth we perpetuated — the industry trots it out whenever major reform is proposed — is that Canadians and people in other single-payer countries have to endure long waits for needed care. Just last year, in a statement submitted to a congressional committee for a hearing on the Medicare for All Act of 2019, AHIP maintained that “patients would pay more to wait longer for worse care” under a single-payer system.While it’s true that Canadians sometimes have to wait weeks or months for elective procedures (knee replacements are often cited), the truth is that they do not have to wait at all for the vast majority of medical services. And, contrary to another myth I used to peddle — that Canadian doctors are flocking to the United States — there are more doctors per 1,000 people in Canada than here. Canadians see their doctors an average of 6.8 times a year, compared with just four times a year in this country.Most important, no one in Canada is turned away from doctors because of a lack of funds, and Canadians can get tested and treated for the coronavirus without fear of receiving a budget-busting medical bill. That undoubtedly is one of the reasons Canada’s covid-19 death rate is so much lower than ours. In America, exorbitant bills are a defining feature of our health-care system. Despite the assurances from President Trump and members of Congress that covid-19 patients will not be charged for testing or treatment, they are on the hook for big bills, according to numerous reports.That is not the case in Canada, where there are no co-pays, deductibles or coinsurance for covered benefits. Care is free at the point of service. And those laid off in Canada don’t face the worry of losing their health insurance. In the United States, by contrast, more than 40 million have lost their jobs during this pandemic, and millions of them — along with their families — also lost their coverage.Then there’s quality of care. By numerous measures, it is better in Canada. Some examples: Canada has far lower rates than the United States of hospitalizations from preventable causes like diabetes (almost twice as common here) and hypertension (more than eight times as common). And even though Canada spends less than half what we do per capita on health care, life expectancy there is 82 years, compared with 78.6 years in the United States.When the pandemic reached North America, Canadian hospitals, which operate under annual global budgets — fixed payments typically allocated at the provincial and regional levels to cover operating expenses — were better prepared for the influx of patients than many U.S. hospitals. And Canada ramped up production of personal protective equipment much more quickly than we did.Of the many regrets I have about what I once did for a living, one of the biggest is slandering Canada’s health-care system. If the United States had undertaken a different kind of reform in 2009 (or anytime since), one that didn’t rely on private insurance companies that have every incentive to limit what they pay for, we’d be a healthier country today. Living without insurance dramatically increases your chances of dying unnecessarily. Over the past 13 years, tens of thousands of Americans have probably died prematurely because, unlike our neighbors to the north, they either had no coverage or were so inadequately insured that they couldn’t afford the care they needed. I live with that horror, and my role in it, every day.

It's actually incorrect to say the duration, lag, tail or time horizon of Berkshire Hathaway's float is short/small. It varies depending on the type of risk that is being assumed.Float is essentially calculated by the following, per Berkshire Hathaway's 2002 Shareholder Letter:"...[W]e have calculated our float — which we generate in large amounts relative to our premium volume — by [my formatting]:[A]dding net loss reserves, loss adjustment reserves, funds held under reinsurance assumed and unearned premium reserves, and then[S]ubtracting insurance-related receivables, prepaid acquisition costs, prepaid taxes and deferred charges applicable to assumed reinsurance."I would say the float at Berkshire Hathaway comes in generally 3 different durations:1) Short duration revolver, credit card-like "float" that funds its claims with incoming premiums in almost a controlled ponzi fashion (i.e. GEICO). For example, the combined ratio year after year for GEICO is around the 90-95% range. This means for every $100 coming in the door in premiums from policyholders, I am paying back policyholders for their auto insurance claims in aggregate $95. And premium volumes are stable and actually growing. What this means is that I can keep funding my liabilities/claims with incoming premiums without ever touching/selling/buying or doing anything with my invested assets. Furthermore, the time lag, duration even for this GEICO and personal auto insurance isn't that quick either. It varies. The lag in claims payments for auto insurance claims is longer for BI or bodily injury coverage, meaning it takes T + 3, 4 years to pay off more than 80% of all the claims from T = 0, the date on which the coverage started. Whereas the lag for other collision and comp coverage claims payments is 0-2 years or so, with most of those claims (80% or so) being paid out more quickly in the same year of the policy coverage due to less litigation and time needed to adjust and settle the claims than for a bodily injury claim. Here is the lag for Progressive in the chart below. GEICO's lag is actually longer (on purpose) but this is a good baseline chart for what auto insurance claims payment lag (i.e. duration of float before "maturity"):2) Short-duration insurance lines, with potentially fluctuating premium levels from year to year. Why would this fluctuation happen? For personal auto insurance above, it's a mandatory coverage people must buy regardless of whether the economy is doing well or not, as long as you need to drive a car. Furthermore, GEICO is the lowest-cost provider by being able to sell directly (not using independent insurance agents who require 10-15% commission). Progressive is moving more and more to direct, as right now their distribution channel is half direct and half independent agencies and they've often been able to squeeze the commissions to below 10-15% from their independent agencies because they drive so much volume. So if you have a product line that's not lowest-cost, you will need to drive the top-line up and down depending on how hard or soft the insurance market is in the current premium cycle to maintain underwriting profitability. Here, you can't take as much volatility on the asset side. NICO, the first insurance carrier that Buffett bought in 1967 for $8.6 million, and the carrier to which he attributes as the baby that is responsible for starting it all and is responsible for at least HALF of Berkshire Hathaway's $373 billion market-cap today, falls into this second bucket of float.3) Long-tailed primary insurance and long-tailed reinsurance float. Long-tailed reinsurance float has been the biggest creator of float for Berkshire Hathaway since the arrival of Ajit Jain in 1985. Buffett started getting serious with reinsurance in the early 80's with loss portfolio transfers (LPTs) but really started in earnest when Ajit Jain arrived in 1985. Jain helped Berkshire become the reinsurer of last resort by reinsuring hairy stuff that many reinsurers would not touch. But given a long-enough tail, even an incremental, additional 4-5% that Buffett could return on the assets backing those liabilities compared to the base 2-4% that most reinsurers were getting from the same amount of assets backing the liabilities, compounded over 10-30 years, makes a massive difference. Compounding for so many years essentially made those liabilities much smaller on an NPV basis for Berkshire Hathaway than for any other reinsurer (even if Berkshire only got 200-300 bps of incremental return). A great example of such "float" liabilities are runoff portfolios like the acquisition of Equitas, a long-dated, seasoned book of asbestos claims from Lloyd's that was in runoff. The February 2014 loss portfolio transfer (LPT) reinsurance transaction which essentially reinsured a runoff block of variable annuities (VA) policies belonging to Cigna, generated $2-$3 billion of float, with excess loss above a certain amount being backstopped by Cigna. No one talks about that - they pay attention to the Heinz deal that happened a few weeks later. Where do you think some of that money for the Heinz deal came from?Below is a great analysis of the role of Berkshire's float from Goldman Sachs in its research report on Berkshire Hathaway in 2010, on a page titled "The Power of Float: collect-now, pay-later":"Put simply, float is the amount of money held by insurers on behalf of other parties – the majority of which is typically funds held to pay future claims. With premiums often collected well before losses are paid, the insurer can invest these funds for its own account. Additionally, for longer-tail lines of business, the timing differential can be decades long. Thus, while any given year will see its share of claim payments go up or down, the amount of float held by an insurer will stay relatively steady to its premium in-take. Thus, for an insurer that is not shrinking, the float can take the form of permanent capital.When valuing Berkshire, we believe it is important to ascribe a value to the float. We believe that the amount of investable capital held by an above-average investor has a tangible value. There are two important distinctions, however:The cost of funds: Over time, there is only value to the float if the investment returns exceed the cost of funds – which for an insurer would be the underwriting profit or loss. As an industry, insurance companies have historically operated at an underwriting loss (i.e. the premiums were less than the combined expenses and claims). Thus, it is Berkshire’s proven ability and stated willingness to focus on profitability (as opposed to growth) in its insurance operations that has allowed the cost of its float to be essentially zero over its multi-decade history. This is also one of the reasons we do not ascribe a value to the float generated by the other insurance companies in our industry, where the track record to assess historical profitability is for most companies too short of a time frame.The “callability” of funds: “borrowed funds” can only be truly invested if there is limited ability for the lender to call the funds. This is what distinguishes BRK’s model from that of a “levered” investment fund – i.e. the funds, for the most part, cannot be redeemed by the lenders (i.e. the policyholders). The one caveat to this however is a catastrophic insurance scenario in which some portion of the float would need to be returned to policyholders. However, as we noted in the section above, BRK’s billions of dollars of cash on hand helps to protect against this scenario.THE VALUE OF FLOAT: If you were to invest a certain sum of borrowedcapital – where the cost of such funds was zero, there was no “callability” to the funds by the lender, and the entirety of the investment returns accrued to your benefit – you would want to maximize the amount of borrowed capital. This is essentially the value proposition for being a shareholder in Berkshire Hathaway – where the float is the borrowed capital."This chart below is a nice graphical illustration from Goldman Sachs, as well, showing the consistent spread below the long-term gov't bond rate. This spread of at least -5% or 500 bps below the 10-year treasury RISK-FREE rate is evidence of an amazingly cheap source of funding. Berkshire has been borrowing at a cost of capital or interest rate 5% BELOW THE 10-YEAR TREASURY RISK-FREE RATE. Think about that.This means Berkshire could have used it's float that's being borrowed at -5% interest and invested it now in the 10-year U.S. gov't bond which is currently yielding a risk-free 2% to achieve A RETURN of 7% PER YEAR BY INVESTING IN RISK-FREE 10-YEAR BONDS!Note the cost of float over time below. It's actually lower than shown b/c if the cost of float was negative (i.e. positive underwriting profits), then it was recorded in this table as 0% cost of float:These are another nice couple charts from Goldman showing the size of the float and its contribution to the intrinsic value of Berkshire Hathaway:Note below the contribution of float from Berkshire's primary insurance-related entities. I comment below re: the big boost of float from the mid-1980's from reinsurance deals, which generated particularly long-tailed, long-duration float for Berkshire:Warren Buffett wrote in 1999 in the annual letter to shareholders, “To understand Berkshire, therefore, it is necessary that you understand how to evaluate an insurance company. The key determinants are: (1) the amount of float that the business generates; (2) its cost; and (3) most critical of all, the long-term outlook for both of these factors.”I provide more color on the nature of Berkshire Hathaway's float in the following: Anonymous' answer to If Warren Buffett had to start today, could he still reach his current level of wealth?Source: www.scmessinacapital.com

Self-insured is not self-administered.Companies are not administering their own healthcare plans — that takes enormous amounts of people and expertise on top of the potential privacy issues mentioned. And they could never hope to get the pricing that the large healthcare companies can.They pay Aetna, Cigna, Blue-Cross Blue-Shield, etc to adminster their plans. It’s largely the exact same to their employees as it is to anyone buying their own private plan from these companies.The differences is that the bill for the healthcare goes directly to the companies. The healthcare company charges the corporations a fee to adminster the plan, but they get access to their network and their pricing.So there’s no one in the employees’ company that has access to the records. All they see is an accumulated total bill.Slightly related though, 3 very large companies — Berkshire Hathaway, Amazon, and JP Morgan Chase have decided to form their own healthcare company. Exactly how that’ll work has not been determined yet, but they believe they can negotiate even better rates to offer their employees better coverage and lower costs.