[ericd]

Insurance tends to have maximum profit percentages mandated, at least in the US. I'm not an expert in this, but I assume that this results in a bit of a perverse incentive where the only way to increase your profit is to increase your costs.

[rjtavares]

If that was the case expenses would never be rejected. The truth is more complicated than that.

[tedunangst]

No, because their income as capped at the premiums collected. They want to spend 80% on expenses, but not more than that. But they also want projected expenses for next year to go up.

[ahartmetz]

Why is that so rarely mentioned in discussions of high healthcare costs in the US? It seems like it could explain everything!