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I posted this before as a response to someone's e-mail a couple of times and someone suggested that I post it as a separate thread:
The idea behind the health insurance companies was that they would create a pool of consumers to purchase health care services from providers at lower prices. Thus, insurance companies would take in relatively small monthly payments from many, many people and then negotiate low prices to purchase services from health care providers.
The problem is that, in reality, to create a pool of subscribers large enough to leverage good price deals with the providers while still managing the risks, an insurance company has to get a huge percentage of market share. If a company can't get a large enough market share, it can't compete.
Thus, mega-insurance companies emerge and dominate the market. Very soon, fewer and fewer companies are in the market and before long there is no or very little competition.
And without competition, there is no incentive for insurance companies to negotiate effectively with providers (such as pharmaceuticals), and a huge temptation for insurance companies to switch from competing in terms of offering lower prices to competing in terms of amassing huge profits and paying management huge salaries.
So, inherent in the whole idea of health insurance is the incentive to 1) create a huge pool of subscribers 2) get a monopoly or dominating share in the industry and thus abolish and avoid competition 3) take profits rather than give lower prices.
Thus, a monopoly on the health care insurance business is probably the only way to insure that people get good health care for a reasonable amount of money. In the health care sector, private companies can't work. They will always seek to grow, grow, grow in order to maximize profits. They will always deny care in order to maximize profits. They will eat each other up. They will spit out the lives of their customers.
How do those who oppose a public option or a government-run single payer plan hope to circumvent these facts of business life.
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