[1123581321]

I am not sure what else to tell you. Companies switch insurance providers for cost all the time. I've benefitted from it several times and seen first-hand how competitive the selection/sales process can be. If an insurer thought they could coast on high prices, losing accounts would change their behavior quickly, like in any company.

As an industry, insurers all benefit from aggregate rising medical costs because of the percentage rule you mentioned, but that's not the same as what an individual insurer will do.

If you're arguing as a proxy for wanting public health to be allowed to enter the industry as a price negotiator, I'm in complete agreement.

[jononor]

Apparently they do not switch often enough to get US medical costs down to the level of other industrialized nations. But that metric it is hardly an efficient market.

[1123581321]

Yes, price competition only goes so far when the underlying thing being sold is expensive and buyers don't have enough power to squeeze suppliers. Hence the CMS comment. Also, switching costs aren't zero (new cards, employee education, etc.), and is be re-evaluated only annually.

The question in this subthread is: do insurers have an incentive to negotiate pharma prices down. The answer is they do have an incentive and they do negotiate prices down.