Where Do Health Insurance Companies Get Their Money? 
Health insurance companies earn their money in basically two ways . First , they collect premiums from people who buy health insurance with goal of paying out less in claims than they collect . For example under the new Affordable Care Act insurance carriers have to spend 80-85 % of their premiums in health care with the remaining 15-20 % for overhead anda small profit . The second way insruance compaies earnincome is from investing their reserves in marketable sercurities , bonds and real estate . Carriers need to maintain reserves for financial stability and based on government regulations . 