Amazon, Apple, Facebook, Google, Ebay and a few more Silicon valley giants have decided to run a united insurance scheme, whereby all of their employees are going to be covered by the same insurance plans. They are also considering starting, or acquiring, their own health care system, which would serve their employees and their families and anyone else who may, in the future, decide to purchase insurance from this new insurance scheme. Even though the companies have signed an agreement that they will all participate, the details of how to do all this are still being ironed out. Amazon CEO Jeff Bezos has asked you for a quick concept note, or brief outline, of how you would approach rolling out this new insurance scheme. Amazon is considering acquiring a pharmacy chain or online pharmacy manager, such as Walgreens, and running the pharmacy business on their own using their highly developed online sales platform. Bezos is interested in getting strategic guidance from your company on whether this is feasible and that would be the risks.

Based on the provided information answer the following questions

• How would you structure the insurance contract?
• Should all services be covered and how much, if any, of the cost should be paid by the patient/employee?
• Should everyone participating in individual plans be charged the same insurance rate? Why?
• In particular, Specific concerns about the nature of underwriting, the insurance pools, the premiums, and the risk profile of the population?
• Should this be just an insurance scheme or must it also have a health care system attached to it? Why?