Quote:
Originally Posted by drcampbell
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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This is very accurate and insightful.
Also add that the steady investment income streams that made private insurance work in the past are gone. I.E. investment with your money in the stock market, bonds and simple savings accounts.
That is how the insurance companies used to make profit rather than take it out of the pockets of customers and doctors.
I recall that the first hike in auto insurance and health care premiums came after the Dot.com bust in 2000......every time interest rates are cut or the stock market takes a dump, insurance rates go up.
