If a company's profits are capped at x% of the money they spend, aren't they incentivized to support higher medical costs?

In theory, they'd be incentivized by the free market to provide the best coverage for the lowest cost to retain and get new customers. But not sure how well that holds up in practice.

The universal healthcare system in many countries is like they said, a publicly funded and operated insurer. I can look in the government portal and see what each healthcare provider billed to the public system for example. One can also have their private insurance cover services or just pay out of pocket. But copying that part blindly in the USA is doomed to fail because along with the universal coverage, there are also strict regulations on what services can be offered privately, how much can be charged for services and what must be covered by private insurance (a fun example I experienced recently was my private insurance not wanting to cover a certain drug treatment; if one doesn't have insurance, the government will pay 100% for the drugs but if you do, they force the private insurer to cover the cost). All areas where there USA is lacking.

Health insurance companies know that the health insurance arm is capped at 80% so they have added vertical companies to capture the profits. Check the full breath of CVS for example. Their Health Insurance may be capped at 80% profits but their doctor’s offices, their pharmacy and so on don’t have a cap. It’s just moving the money around to comply with the 80% rule while moving the profits to sister companies along the stack. Basically Hollywood accounting in health insurance.