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355 points pavel_lishin | 2 comments | | HN request time: 0.001s | source
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RobKohr ◴[] No.45389953[source]
"Federal funding typically covers 80% of bus purchases, with agencies responsible for the remainder."

Well, there is your answer. The one making the purchase isn't the one primarily paying for the purchase. This makes them less sensitive to pricing.

Kinda like how expensive healthcare is since it is paid for by insurance.

Or how you don't care how much you put on your plate or what you choose to eat at an all you can eat buffet.

The second you detach the consumer from the price of something, even through an intermediary such as health insurance, that is when they stop caring about how much something costs, and so the price jumps.

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frollogaston ◴[] No.45390102[source]
Shouldn't insurance care about the pricing though? I get why federal govt isn't sensitive, given 0 competition.
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SoftTalker ◴[] No.45390166[source]
Insurance profit is limited to a percentage of what they pay out. So the more they pay, the more money they make.
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1. VirusNewbie ◴[] No.45391606[source]
wow, why would they cap it that way? that makes no sense.
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2. darkerside ◴[] No.45392961[source]
It makes a ton of sense in theory. In a fair market, you would want to prevent the insurer from charging super high premiums that let them make a large profit relative to the cost of care provided.

The problem is that it doesn't stop there. There is a second order effect.