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Health insurers in most states are subject to a minimum loss ratio that says they must payout 85% of the premiums they take in. Insurers operating near this cap
by mrfredward 7y ago
Health insurers in most states are subject to a minimum loss ratio that says they must payout 85% of the premiums they take in. Insurers operating near this cap actually have an incentive to pay out more money in order to raise the cap on their profits.
- lotsofpulp 7y agoThen competing insurers can steal their insureds away with lower premiums. The caveat is that we must abolish employer sponsored healthcare, dump everyone on healthcare.gov, and provide a sufficient pool of healthy lives to make providing insurance viable.
- dumbmatter 7y agoI don't think that can explain it, because IIRC that rule has only been around since Obamacare, but the US/world price disparity for prescription drugs has existed much longer than that.