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FYI, in the US insurance companies are regulated such that: "No more than 20 percent of premium revenue can be spent on total administrative costs, including pr
by ishjoh 7y ago
FYI, in the US insurance companies are regulated such that:
"No more than 20 percent of premium revenue can be spent on total administrative costs, including profits and salaries."[1]
So the difficult thing is they are incentivized to increase revenue to increase profits, and cutting costs won't result in more profit.
[1] - https://www.verywellhealth.com/health-insurance-companies-unreasonable-profits-1738941 https://www.verywellhealth.com/health-insurance-companies-un...
- secabeen 7y agoYep. And a lot of big companies are self-insured, so the "insurance company" is actually just an administrator for the big company's insurance pool. Thus reducing the cost incentive even more. Competition could help, but there just aren't a lot of insurance administrators that can run plans for the biggest companies, so there is little competitive pressure on price.