That's all true, but insurers are ramping up premiums faster than inflation largely because providers have raised their prices, and utilization has greatly increased due to an aging sicker population. The ACA minimum medical loss ratio means that health plans profits aren't increasing much.
Percentage wise profits might not increase, but 10% profits on a $2000 plan make an insurance company (and execs) more than 10% profits on a $200 plan. It's in their interests and income stream for costs to constantly go up so they can get their 10% take. Efficiencies and price savings would actually hurt them (can't have plan rates go back down and only get their 10% off of $200).
That ignores competitive pressures. Commercial health plans aggressively negotiate rates with their network providers in order to get market share with cost sensitive customers. If your claim was accurate then insurers would just take whatever rates that providers set but the reality is that doesn't happen. Health plans routinely drop more expensive providers from their networks.
Rental companies have incentives to get market share with cost sensitive customers too. They would totally never have a system (or use colluding software) where everyones rates just go up.
Fun fact, people in fact can't just 'do without' for housing/medical care, so can't act in a manner that keeps the market in check. Therefor neither of those two segments can be treated as actual markets, or expect the typical benefits of actual, working markets.
> Rental companies have incentives to get market share with cost sensitive customers too. They would totally never have a system (or use colluding software) where everyones rates just go up.
If you're talking about RealPage, the actual effect it had was putting more units on the market and lowering rents, not raising them.
I'm surprised so many people miss this. The insurers have an incentive for medical costs to go up, so that their (capped) share results in higher profits.
What happens in practice is that a provider charges $200 for "distributing Advil" and $50 for two pills. Then the insurance company, whose legally allowed profit is proportional to payouts, "negotiates" the price down to $150 total and claims to the person "we saved you $100". Then their accountant says "we paid out $150, so we get a profit margin of $40" (instead of the $0.50 they would get with a real at-cost charge).
But the price is made up nonsense and 100x actual cost for 15 seconds handing a 1¢ pill over. Which is why asking for an itemized receipt and saying you can't afford that suddenly drops the bill to $1.50.
When providers don't "play ball" with the price fixing the way insurance company wants, they go off network.
Medicaid and Medicare set service rates by fiat, which is why many providers don't accept patients on those plans. Commercial health plans have to negotiate service rates with their network providers. There's no discount as such: if you receive service from a network provider then they have to charge the negotiated rate.
