Final answer:
Insurance companies hold the authority to decide coverage details within regulation limits. Regulators cannot compel insurers to take sustained losses through low premiums or excessive coverage. Premiums must cover claims, operational costs, and profits, or else other insurance buyers or taxpayers must cover shortfalls.
Step-by-step explanation:
Who controls the policy and maintains the right to make all decisions regarding coverages? It's primarily the insurance companies that have the authority to decide on policy specifics and coverage levels, within the boundaries set by government regulators. Insurance firms are subject to regulations that ensure actuarial fairness and are designed to maintain financial solvency, but these same regulators cannot mandate sustained losses through enforced low pricing or high coverage levels. This balance ensures that insurance premiums adequately finance the anticipated claims, operational costs, and provide for the company's profits. As a result, if premiums were to be set too low for one group, then taxpayers or other insurance buyers would indirectly be shouldering the cost. Furthermore, the discussion around the governmental domain of healthcare policy touches upon whether it's a state's responsibility or a federal mandate under the provision of 'general welfare.'
The fundamental law of insurance stipulates that the collected premiums must fund the claims, expenses, and profits of an insurance company. Therefore, if an insurance company attempts to charge an actuarially fair premium to all insurers as one large group rather than to each subgroup based on their specific risks, it may result in some groups subsidizing others, possibly leading to dissatisfaction and a risk of losing customers.