[xp84]

> since another insurance company would just steal their customers by having lower

LOL. Meanwhile, in real-life America, there are only four or five major carriers that control the market, and none of them are incentivized to do this "competition" thing you speak of by engaging in damaging price wars. Why would they when continuing to be part of the problem makes them more and more profits each year? See also: military contracting. Do you see them constantly undercutting each other? No, they buy each other, reducing the number of bidders on every contract.

[lotsofpulp]

>Why would they when continuing to be part of the problem makes them more and more profits each year?

In real-life America, they don't even earn enough profit to earn their shareholders a better return than SP500:

https://news.ycombinator.com/item?id=45736978

And in real-life America, the only people health insurance companies engage in price wars with is the state insurance regulator who gets to deny requested price increases.

[xp84]

Fascinating observation, thanks for challenging my assumptions here. Just seems to further point out how useless health insurers are, even to their shareholders.

My most sincere wish is that all insurers would be nationalized, every last employee summarily fired, and their HQs all imploded and replaced with memorials to all the people whose lives they have cut short over the years. Not a thing of value would be lost IMO. Worse than paying people to dig holes and fill them in again.

[astrange]

The military encourages them to buy each other because it's much easier to regulate an industry with fewer companies in it.

[Aloisius]

Four or five competitors is plenty for a healthy market.

Where I live, they do compete on price - prices vary by about 30% for similar coverage. They can't engage in the kind of price war you're thinking of since insurance companies, by law, have to maintain a fund able to cover costs, have to get rate changes approved by regulators and are largely banned from price discrimination.

I understand the desire to shift blame entirely onto insurance companies rather than providers. After all, one is all about money and the other is seemingly all about healing.

Heck, when a provider does bill people directly because an insurance company refused to pay, we blame insurance companies - even when the charges on those bills are highway robbery - like those in the article itself.

The fact is, the net cost of health insurance was about $279 billion in 2022. Meanwhile, $3.7 trillion went to healthcare providers, pharmacies and the like for care. The ones who stand the most to gain from higher prices are providers.

Frankly, decades of lobbying from the healthcare provider lobby to enrich themselves should have made it this obvious, but sadly, people see doctors as selfless angels and it blinds them.

[BobbyTables2]

Providers have certainly gotten greedy but still can’t compete against hospitals when it comes to ridiculous billing.

I practically damn feel sorry for surgeons when I see what they get from insurance versus the hospital for providing the operating room or bed.