Note how few "indemnity" health plans we have anymore in the US--everything is now HMO/PPO. This was the mechanism. The HMO/PPOs were wildly more profitable--

Note how few "indemnity" health plans we have anymore in the US--everything is now HMO/PPO. This was the mechanism. The HMO/PPOs were wildly more profitable--because they picked off the "below average cost" patients leaving the "above average cost" people to the indemnity plans. Of course, then the indemnity plans collapsed under the weight. And then the HMO/PPO systems created "recission groups" to prevent having to take them on. And then it took until the Affordable Care Act forced the coverage of "preexisting conditions" to unwind the bullshit that the HMO/PPO systems caused in the first place.