Uwe Reinhardt on Insurers Part II

05 Oct

In case you missed it, here’s my link to Uwe Reinhardt’s look at insurance company finances, part one. Prof. Reinhardt posted part two on Friday, and you can take a look at it here. All of this gets at the questions: “What service do insurers provide and how much money should they be making for providing that service?” The obvious answer is “risk-pooling” but it’s not that simple. They’re determining who and what they’ll cover, how much they’ll pay for health care benefits, and figuring out how to maximize their profits while doing it. In the dictionary, under “perverse incentives” it says “see insurance companies.”

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Posted by on October 5, 2009 in Uncategorized


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