Health insurers in most states are subject to a minimum loss ratio that says they must payout 85% of the premiums they take in. Insurers operating near this cap actually have an incentive to pay out more money in order to raise the cap on their profits.

Then competing insurers can steal their insureds away with lower premiums. The caveat is that we must abolish employer sponsored healthcare, dump everyone on healthcare.gov, and provide a sufficient pool of healthy lives to make providing insurance viable.

I don't think that can explain it, because IIRC that rule has only been around since Obamacare, but the US/world price disparity for prescription drugs has existed much longer than that.

> This simple answer is satisfying to many who otherwise prefer single-payer plans, but doesn't really hold up to scrutiny

I mean, it fails the even more basic scrutiny that Canada simply does not have a single payer for pharmaceuticals, or even a handful of single payer provinces. It's much like the US in structure (out of pocket or private insurance), simply with price controls.

Well, if UHC decides to negotiate hard and fails, then people will leave UHC and move to another insurer which is willing to pay those insane prices.

If country X (with single payer plans) does the same thing, the only choice the pharmaceutical company has is to not be covered by insurance, which mean they won't sell their drug. Also the state can just pass laws to make the pharmaceutical company life's miserable. UHC can't do that.

I'm sure they are able to negotiate but the question is whether the savings get passed to the customers or payments keep going up?