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Yes, but if they are capturing 4% as profit on 17% of the premium, they have a perverse incentive to keep costs high, which is directly opposed to their custome
by kurthr 10y ago
Yes, but if they are capturing 4% as profit on 17% of the premium, they have a perverse incentive to keep costs high, which is directly opposed to their customer's interests.
- maxerickson 10y agoSure. I was just pointing out that we have pretty clear information about the amount of money that ends up inside the insurance company and how much gets passed on to providers. In a functioning market they would face competition for customers and try to lower premiums (and so try to lower costs). In our system they seem to look at provider prices in a region and decide if they can profit there or not (and in the case of non profits, if they can operate without losing money).