Health-insurance profits

by Rob Horning

2 September 2009

 

Tyler Cowen does some cursory research and suggests that health insurers may not be all that profitable. Thus, the implication seems to be, they must not be the villain that would-be reformers sometimes make them out to be. But their profitability is not the crux of the problem; profits may be held down by the effectiveness of competition from other insurers. And it is this competition that then prompts their most egregious practices, such as rescission. It’s not the level of their profits, it’s the fact that are a for-profit concern that rubs reformers who want a public option, I suspect.

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