you've cleverly argued in a way to make hidden the major point i wanted to make - which is that insurance companies making a profit is a loss to the payer. I'm purely talking about the insurance system, and not the medical provider system (hospitals/doctors etc).
> The large majority of the money isn't going to the insurance company, it's going to healthcare providers.
Any money going into insurance as profit is a loss to the payer - insurance doesn't _provide_ value. If the gov't is the one "doing the insurance" as you say, then any profit from that operation will count as a lowered cost of providing medical treatment.
> allows people to make risky/unhealthy choices and socialize the costs of those choices, and therefore why high deductible insurance is more efficient by introducing at least some price sensitivity.
so therefore, insurance companies will pick out the least risky people, least unhealthy, and not allow the sick into their programs. That is exactly what you see today, because those more ill people are what saps the profits.
The price sensitivity is at the wrong end - it should be at the medical provider end, not at the insurance end. Why do you think the cost for treatment is low when you're covered under medicare (for low income people)? It's because medicare is such a large buyer that hospitals are able to sell their services at that low a price.
> This is equivalent to legislating prices. They can already do this regardless, but it's a bad idea for the same reason price controls in general are
no it's not price control. It's buying power, from a single entity that is not profit-driven. The market for medical treatment is unchanged under my model. Insurance companies currently all own their own little monopoly in their region/network, and hence, there's no competition for pricing the medical treatment today. You are forced into the insurance's monopoly (or face the higher ticket price hospitals charge because they can).
> why wouldn't the insurance companies be doing it too?
> ... if the government really is so much more efficient then they should easily be able to out-compete the insurance companies
Insurance companies provide efficiency in operation vs gov't perhaps - i don't know. But what efficiency they provide is taken out as profit instead of being passed on to customers. And insurance company's efficiency is not in lowering the cost of medical care - it's in finding customers that don't cost them more than premiums they charge. They are more incentivized to keep medical costs high to force people onto insurance plans (that they negotiate using their purchasing power)!
There is no real place in the world for a profit-making medical insurance company imho. Or, if there is, they will be _in addition_ to a tax-payer funded universal healthcare system, and they can provide non-medically necessary operations that are not covered by the universal system.