View Poll Results: Answer according to the hypothetical

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  • Increase it at the 4 year mark

    1 20.00%
  • Increase slowly in the time between now and then.

    2 40.00%
  • Increase quickly in the time between now and then.

    1 20.00%
  • Other

    1 20.00%
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Thread: Products, regulation, and the economy

  1. #11
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    Re: Products, regulation, and the economy

    Quote Originally Posted by reefedjib View Post
    The greatest shortcoming in the Healthcare bill was not opening up insurance companies to compete across state lines. Without minimal competition they only have to make sure their rates are competitive with the few other insurance companies in their market. That said, I would wait until the costs increase before raising my rates.
    Thanks for the response.

    Might I ask why as a businessman of said generic product would you take option 1 rather than 2 or 3? What would spur this decision?

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    Re: Products, regulation, and the economy

    But they have their underlying costs and revenues which are competitive. Let me add benefits to that mix. Given a couple of insurance companies in a region, they have different benefits (one a PPO and the other an HMO) at different rates with different costs depending on their underlying members' health. If both have to add $2000/year to their rate, then they may want to change benefits and cost to stay in the game. I think they want to balance cost benefit to maximize their member pool and their corresponding revenue.

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    Re: Products, regulation, and the economy

    Quote Originally Posted by Zyphlin View Post
    Thanks for the response.

    Might I ask why as a businessman of said generic product would you take option 1 rather than 2 or 3? What would spur this decision?
    Stay competitive for as long as possible.

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    Re: Products, regulation, and the economy

    Zyphlin,
    In this hypothetical are we to assume that other measures of value beyond price will remain constant between different insurance companies.

    For example, someone might gladly pay a premium if it means that the insurance company provides other services such as an on call nurse, prescription information, a good website, partners that bring other types of value, a registry of who is the best doctor in the network for a certain type of illness, etc.

    Wow, after reading this, it is obvious I am going to way too many meetings that use buzzwords.
    Last edited by tacomancer; 03-23-10 at 03:25 PM.

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    Re: Products, regulation, and the economy

    Quote Originally Posted by reefedjib View Post
    Stay competitive for as long as possible.
    Ah, so going on the assumption that either others will not go up, or only go up a little bit, and thus keeping level or under them will give you more business in the interim and banking on only light backlash when having to raise the rates greatly in the future or that the government would fix your price to a point lower than what you would need to turn a worth while profit?

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    Re: Products, regulation, and the economy

    Quote Originally Posted by megaprogman View Post
    Zyphlin,
    In this hypothetical are we to assume that other measures of value beyond price will remain constant between different insurance companies.

    For example, someone might gladly pay a premium if it means that the insurance company provides other services such as an on call nurse, prescription information, a good website, partners that bring other types of value, a registry of who is the best doctor in the network for a certain type of illness, etc.

    Wow, after reading this, it is obvious I am going to way too many meetings that use buzzwords.
    LOL. Useless meetings and fancy buzzwords is what makes the corporate (and government) World go round

    And yeah, its assuming all things are equal, or equal enough that price is goin to be the primary differentiator that you have can account for. As i said, this isn't even as much specifically focused on insurance but just on economics and products in general here. There are other ways of course one could do to try and help the issue but this is focusing primarily on cost of operation and price of service.

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    Re: Products, regulation, and the economy

    Quote Originally Posted by Zyphlin View Post
    LOL. Useless meetings and fancy buzzwords is what makes the corporate (and government) World go round

    And yeah, its assuming all things are equal, or equal enough that price is goin to be the primary differentiator that you have can account for. As i said, this isn't even as much specifically focused on insurance but just on economics and products in general here. There are other ways of course one could do to try and help the issue but this is focusing primarily on cost of operation and price of service.
    Hrm, that leaves out using branding too. You had to make it hard didn't you.

    Speaking generally, I would go with option one and start raising prices right before the regulations take affect. By than the actuaries should have figured out the proper costing with the new rules and it will afford you the flexibility of trying to lock in as many customers are you can before raising prices and blaming it on the government (whether the blame is fair or not does not matter).

    However, this does not include factors such as the economy, performance of investments, etc.

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    Re: Products, regulation, and the economy

    So you would ramp it up before hand, just not quite as far out from the point of regulations beginning as option #2 would be, so somewhere between #1 and #2.

    So your hope would be that the blame on the government would win out over blame of greed, or over consumer shock at the sudden increase? And you think it'd be a worth while risk that the government wouldn't fix your price lower to than the point you hope to increase it to? Or would you increase it higher than you would need in anticipation of such a price fix in hopes of negating that affect while still being able to hold off till just near the end to raise your prices?

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    Re: Products, regulation, and the economy

    Quote Originally Posted by Zyphlin View Post
    Ah, so going on the assumption that either others will not go up, or only go up a little bit, and thus keeping level or under them will give you more business in the interim and banking on only light backlash when having to raise the rates greatly in the future or that the government would fix your price to a point lower than what you would need to turn a worth while profit?
    I agree with the first bold. What is the second bold? I don't understand the government fixing a price.

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    Re: Products, regulation, and the economy

    To my understanding price fixing is generally when a group of businesses or people selling a particular item get together to agree that it will be sold at a specific price or above/below. Typically it happens with a minimum being set above what would be the actual cost and everyone going above that, garaunting profits for all. (This is illegal to my understanding in the U.S.) It can also be used in a top down method (with a cieling rather than a bottom) in an attempt to stabalize prices or force a discount.

    In this scenario I'm suggesting the government putting a cap on the price at which you could sell your generic product, essentially creating a price fix, with said cap being below the level you would idealy wish to sell your product act.

    I'm sure someone more educated about how this works could fill it in better than I.

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