5 ms·

"More efficient" in this case meaning whoever can discriminate the most, and whoever can deny the most claims without getting caught.

• maxxxxx 8y ago
  That can be checked by enforcing regulations. Grocery stores don't compete over circumventing food safety regulations.
  • monocasa 8y ago
    Having worked in a grocery store, I know that's not true.
  • s73v3r_ 8y ago
    Yeah, this idea of comparing insurance companies to grocery stores doesn't really fly.
    • maxxxxx 8y ago
      Why not? Both have to operate within rules as long as they are enforced. So if the rules tell them to not discriminate they have to follow them or face consequences.
      • LargeWu 8y ago
        Because the upside to these companies has a pretty low ceiling, especially if there is downward price pressure because insurance companies can't differentiate on risk or coverage. This leads to very thin profit margins. However, due to the nature of insurance, even a relatively small number of people developing expensive conditions can be catastrophic. Remember, in your scenario, you are REQUIRED to cover them. If you're going to have only one combined risk pool, you need to be able to guarantee coverage even facing catastrophic insurance costs. The only real way to do this is to be backed by somebody with very, very deep pockets, like, say, the federal government.