Unintended Consequence of the Affordable Care Act.

[Heywood]

They will learn to bother when they find out their competitors who do actively prevent fraud can offer a better deal than they can and all their customers start walking away to get that better deal.

Markets are a bitch like that.

My point is that before this government intervention every dollar of fraud and waste saved by the insurance company translated into an extra dollar of profit(if we ignore the cost of looking for fraud and waste for simplicity sake). After this government intervention every dollar of fraud and waste translates at best into only 20 cents of additional profit. The profit incentive to look for fraud and waste diminishes quite a bit.

Its very true that the market force you speak of didn't go away because of this intervention, but it wasn't the only market force in play. Insurance companies may still have some incentive to look for fraud and waste, but those incentives are much weaker now then before this government intervention.

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However, I see as a potential unintended consequence of this provision of the law a lessening of an insurance companies incentive to prevent fraud/waste.

The intended consequence is to stop insurance companies from sucking money out of the system for the benefit of their officers and stockholders which is about all that fucking insurance companies are good for.

The ACA does just the opposite. It mandates that everyone be a customer of the insurance companies. It mandates people purchase coverage they do not need(why should a male be required to purchase a policy for himself that covers maternity?). It re-reimburses insurance companies if they happen to lose money. There is a reason the stock prices of insurance companies have been climbing much much faster than the rest of the market. This law allows the officers and stockholders to suck off more of the nations GDP. This law is blatant corporatism.