Mutual vs Commercial
Mutual vs Commercial Insurer
The main difference between a mutual-funded health insurer and a commercial health insurer is the ownership structure and the way profits are distributed.
A mutual-funded health insurer is owned by its policyholders, who are also the beneficiaries of the insurance. This means that any profits made by the insurer are returned to the policyholders in the form of lower premiums, improved benefits, or dividends. Because policyholders are the owners, they have a say in how the insurer is run and the services it provides.
In contrast, a commercial health insurer is owned by shareholders and operates for profit. Any profits made by the insurer are distributed to the shareholders in the form of dividends or reinvested in the company to fuel growth. Policyholders do not have any ownership stake in the company and do not have a say in how it is run.
Overall, the main difference between a mutual-funded health insurer and a commercial health insurer is the ownership structure. Both have positive and negative impacts on policyholders in different ways.