[cpburns2009]

Profit margins are capped by percentage. That creates the perverse intensive for insurance companies to pursue ever increasing costs in order to increase profits.

[ars]

You are forgetting about competition, increasing costs means directly increasing premiums, and higher premiums means lower business.

[cpburns2009]

What competition? When enrollment comes around or you switch jobs you get maybe two insurance providers to choose from.

[jimbokun]

But they don’t do this.

They fight tooth and nail to keep the claims paid to doctors and hospitals low.