That is not really how the modern medical insurance business works. Most group buyers such as employers are now self insured. The medical "insurance" companies no longer bear much risk, they merely administer claims and manage provider networks. This business is intensely competitive with low profit margins. Insurance companies have to negotiate lower costs in order to sell to their customers, which are primarily employers that buy plans on behalf of their employees.

Costs have continued to rise because provider organizations have been merging in order to gain more market negotiating power. Expensive patented drugs and medical devices also play a major role in driving up costs.