What happens to the part of the company's income that isn't spent on claims and administrative expenses?

Any monies not used for claims and administrative expenses may be kept in the company's reserves to strengthen the financial position of the company, to ensure there are adequate funds to cover future costs as no one can predict future claims costs with 100% accuracy. Companies also use extra reserves to cover the costs of very expensive improvements for such things as updated information technology (IT) systems. For-profit health carriers must consider their stockholders when making financial decisions.