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No, it actually does make a lot of sense – if you're a big insurance corporation (or cartel of corporations) with a majority market share.
The number of people who have medical insurance policies is more or less constant. It's almost impossible to increase profits by increasing the number of people enrolled.
Most of the policies are purchased by other corporations, not individuals, so the price will be subject to intense scrutiny, making it almost impossible to increase profits just by raising rates.
So how do you increase profits when you're caught between not being able to sell to more people and not being able to raise prices? Lobby the government to mandate a bunch of stuff that people wouldn't otherwise pay for. Sure, it raises costs, but it raises premiums (and profits) even more. And if some small, aggressive insurance company wanted to bite into the big corporations' market share with bare-bones, low-cost (and low-margin) policies, they're now prevented from doing so. It's a classic protection racket on both ends.
Unrestrained capitalism leads to two things: monopolies and corruption.
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Douglas Campbell, P.E.
1986 Isuzu P'up, 177,673.8 miles.
- Hella headlights (highly recommended)
- DOT C-2 back end (also recommended)
- R-12 air conditioner converted to R-406a. Saved ozone and money
- 4.1:1 final drive converted to 3.4:1. Quieter, better mileage but it's a good thing I live in the flat Midwest.
- 9/22/2007, age 21: Still running well when reluctantly sent away for reincarnation, due to body & frame rust.
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