I like non-profits a lot as well.
In addition to having less conflict with shareholders, non-profits are supposed to operate differently than for-profits.
Included in the operational aspect is offering plans which are not provided by the for-profit insurers.
For example, in the past, non-profits were looked to be insurers of last resort, or insurers that offered community ratings. They were looked to provide benefits for the community, whereas their for-profit competitors were looking to provide profits for their shareholders.
In addition, if a not-for profit does not sell products to the public, but rather to a limited, defined group, it has additional incentive to set itself apart from those insurers providing plans to the public.
Don Levit

For example, Ford did a cost-benefit analysis of adding an $11 part to the gas tanks of the Pinto and found that it was cheaper to handle lawsuits stemming from burn deaths and injuries than it was to add the part.

Now take a health insurance company that does a cost-benefit analysis of paying claims according to the specified contract vs. having a talented legal team to take on these clients that don’t have enough money to even hire a lawyer and are now dealing with a major illness on top of everything. It’s a no brainer for the insurance company. When you have cancer is not the easiest time to fight an insurance company that isn’t living up to their end of the bargain.

Being non-profit removes the conflict of interest a little.

(to save myself time, the example was a copy and paste from a comment I made on another blog recently.

What are the advantages to being a non-profit?
Don Levit

What i am trying to accomplish with the underlying defined contribution plan is 2 things; make the premiums affordable, and encourage the healthy to stay in the pool.
Don Levit

Getting to the point of a rider for catastrophic coverage though:
When the catastrophic lifetime maximum (say $5 million) is bundled with the policy, the risk is spread over the entire pool of insureds. So the small number of people using it have the cost spread over the entire pool. And thus, we have textbook definition of insurance.
So, in my opinion, it is pointless to break it up like that because:
- The price is nearly the same to have the extra coverage anyway, because the risk is being spread.
- If people on the policy get bankrupted by catastrophic events, it’s not insurance.
- What is the point of complicating things if combining them makes it basically the same price and offers good coverage?

This is why premiums should be based on a defined contribution model, at least up until a separate catastrophic coverage “rider.”
As Jay pointed out, catastrophic premiums add little to the total cost, so having $1,000,000 of catastrophic coverage shouldn’t be too much less expensive than $5million of benefits.

An effective break-point between underlying coverage and catastrophic coverage is from $25,000-$50,000.
This is where the defined contribution benefits should be placed, in my opinion.
It would work like a retirement plan in which coverage varies directly with contributions made, less claims incurred.
What do you think?
Don Levit