Comment by snakeyjake
1 year ago
>there are 4 to 6 others waiting to take their customers with lower premiums
Why do people believe this?
Healthcare isn't widgets and factories in an ECON-101 class.
The chances of anything short of an extremely large and well-funded consortium of investment bankers and private equity firms starting a new MCO is exactly and precisely 0.0%.
And those groups have the same incentives to maximize the payouts to all parties involved that the incumbents do.
Of course, they would never do that because increased competition would threaten their already-extensive investments in the sector.
The problem isn't regulation, or regulatory capture, or any other buzzword a podcast full of morons bandies about.
The problem is that you need at least $10 billion just to open the doors.
> Why do people believe this?
Because there are.
UNH/Elevance/CVS/Cigna/Humana/Centene/Molina are just the biggest publicly listed ones. They might not all offer plans in all states on the exchange, but there’s a decent amount of competition for employer subsidized plans.
The low single digit profit margin proves the competition exists such that the sellers don’t have pricing power to earn a higher profit margin.