"Reimbursement tends to be higher for, in the insurance lingo, the riskier population," said Shahed Al-Haque, a partner at McKinsey. "Because [plans are] getting a higher level of reimbursement and the cost does not necessarily scale at the same level of reimbursement, they're able to achieve profitability."
The big picture: The profitability of insurance plans' government segment is expected to be 65% higher than the commercial segment by 2027, per McKinsey.
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