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Not likely; insurance companies have no incentive or motivation to reduce the cost of healthcare. The more money that moves through the healthcare system, the m
by DougWebb 11y ago
Not likely; insurance companies have no incentive or motivation to reduce the cost of healthcare. The more money that moves through the healthcare system, the more money that passes through the insurance company. That gives them power, giant transient account balances, and "too big to fail" status.
- digikata 11y agoI agree in part. It seems like in practice it looks like insurance companies have little interest or capability to reduce healthcare costs. However, I don't understand your reasoning as to why. The high cost of drugs puts the health insurance companies in competition with drug companies for actually ending up with money in hand flowing through healthcare.
- DougWebb 11y agoThe health insurance companies collect money monthly from all enrolled participants. That money sits on their books until it has to be paid out for claims. Higher healthcare costs means that the insurance company can raise the monthly premiums, which means that it's got more money sitting in it's accounts before the claims get paid. That money isn't under a mattress; the insurance company has it invested in something that's earning interest. So higher healthcare costs == more interest earned on the premiums as they pass through the insurance company on the way to paying claims.