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There is some incentive, but when you tell someone you can only make a profit of (for example) 10% of what you pay out; it warps their incentives. They don't w
by pnutjam 6y ago
There is some incentive, but when you tell someone you can only make a profit of (for example) 10% of what you pay out; it warps their incentives.
They don't want to bankrupt themselves, but they can raise rates and keep more money when they pay more.
- maxerickson 6y agoThis assumes they don't have any competition looking to take their market share (which reduces their intake). It can be the case that the market isn't very competitive, but it isn't the case that the companies can just arbitrarily raise rates.
- pnutjam 6y agoOnce a year the company can shop around, but you as an insured have no say. Your HR picks, and they may or may not be competent. They may optimize prices for family, or for single people, or any number of weird things.