Often times (at least in my industry--telephony), it is nearly impossible to negotiate low prices yourself without significant volume to afford better contracts.
I'm certain that everyone running an API company wants their prices to be as low as possible for their consumers, and it seems to me that your comment is really just attacking the guy unnecessarily.
I know of a guy who has a database for which he charges $5000 per lookup. Is that not a "reasonable price?" Well, turns out it contains contract details, including expiration and re-bidding dates, for multi $-MM corporate contracts. If you're a sales team angling for a $500k commission, paying $5k to look up a single record suddenly makes sense.
(I agree that ideally the info that Eligible is selling should be available for free, in real-time, from insurance companies. Guess what; it's not. But redirect your anger, buddy: Eligible is part of the solution, not part of the problem.)
Is it very specific to a certain type of business contract?
There are some providers that do eligibility checking for free for big payers (I think Availity does) but then you have to process the mess that is X12. Trust me when I say that you want to stay as far as possible from dealing with X12 files.
Other providers charge up to 20 cents per inquiry and still return X12 response. 5 cents and JSON make this highly competitive.
We've been killing ourselves over this data format and connections work for the past 9 months, so to us 5 cents per successful call seems like a steal.
So I make an app for some kind of medical pro to use, give it away. A not very busy clinic, say at 50 patients per day currently manually checks and is frustrated. I say, hey, for $100 a month you can check all those patients using my fancy app that will make your life easier. $100 a month to a business for something like this is probably a no brainer. And at that price level there is still profit to be made before any bulk discounts :)
Maybe I should do this...
You seem to imply that setting high prices is a dishonest practice. If you don't find enough value to justify the high cost, just move on, that might not be true for others.
Perhaps I am having a bad day, but is it really necessary to thank someone for their question? Seriously, this makes me feel like I am dumb for asking a question.
I understand you trying to be extra polite, but I am sure you won't start a conversation with "thank you" every time your wife, son, daughter, lover or employee ask you a question. So while many will appreciate your "politeness throw-up" attitude, personally you just caused my red flag to pop up, because I honestly feel your politeness is fake.
> I respect your point about 5 cents being high. We, of course, will evaluate that as time goes on.
His, and everyone else who ever paid for API and knows what is reasonable price what's not. To me this "We, of course, will evaluate that as time goes on." stripped out of bullshit means this "We will try to make fortune (or something like 100,000% profit margin on those simple text requests to our server) and will benchmark traffic, and if we don't get enough suckers to sign up, then we, of course will lower our price".
I can bet you $50 that after the initial wave of HN interest, your value versus cost ratio will scare 99% of those who need to use service similar to yours. Please don't forget to post a news where you go down to a reasonable rates, like 1,000 hits for 1 cent (Sendgrid, MailChimp, etc, etc).