re: #156 LudwigVanQuixote

So onto this topic, why is it a bad thing if private insurance gets replaced by a gov’t insurance plan?

I would think from basic economics that:

An insurance company makes its money by calculating the odds that its customers will need certain services, banking on the fact that they will not all need those services, and charging sufficiently high enough rates to everyone, to cover the times they do need to pay out - after fighting tooth and nail - to make a profit.

So therefore, the money you pay into the insurance also pays for their profits… And therefore does not go into providing healthcare for anyone.

If you took them out of the loop and had a not for profit government run insurance system, that would mean putting more dollars into actual medical care for people who need it.

What is flawed in this analysis?

The profit motive is the key to delivering value (because your customers will go elsewhere if they don’t get it) and controlling costs (because you will not make a profit if you don’t control costs). Without it, a market will turn to other perverse incentives - price controls, rationing, exploding bureaucracies, lack of service providers.