Auto and Car Insurance

can we benefit from allowing companies such as Auto/Home insurance Geico, Allstate to sell health insurance?

The more people we have paying their own insurance will it drive down the cost due to competition?

Public Comments

1. Yes, competition is good. It would also help it there were transparency in pricing for health care services. When is the last time you walked in to a hospital and saw a big board with what it costs to see a doctor or have an x-ray or get some stitches so you could shop around for services in non-life threatening situations?
2. Well, the PROBLEM is, I don't know of ANY companies that write health AND auto. So I'd hazard a guess that regardless of whether or not we, the consumer, would benefit, the COMPANY isn't going to benefit from it. Also, health insurance rates aren't high because there isn't much demand for health insurance - health insurance rates are high, because the CLAIMS are really, really, really high. So the law of supply and demand here really isn't going to apply.
3. - I'm not sure what you mean by "allow"; who's stopping them? Got enough money to meet your state's minimum requirement for starting an insurance company? No one will stop you; go ahead start your own health insurance company! GEICO backed by Berkshire Hathaway certainly has the financial backing to sell health insurance if they want to. What few people realize in insurance pricing is insurance companies will price their policies based on what their competition charges. Each company want to take on good risks, make a healthy profit margin and NOT be considerably cheaper than their competition. In the health insurance biz we're talking a good 15% profit margin. In a auto only company like GEICO, the margin is more like 35-40%. In central Ohio where I live there are around 500 companies selling auto insurance but only a dozen (maybe as many as 20) that offer individual or group health policies. Why the big difference? Health insurance has higher frequency of use and is more service intense than auto insurance. Larger companies have an economy of scale. Since the number of health insurance policies is limited by the demand for health insurance which is limited by the number of people who can afford it or are considered "insurable" by health companies, having more companies would mean each insurer is processing fewer people, forcing costs per person up not down. Having more companies will NOT force insurers to take on high-risk clients or force down the costs of medicine or treatment. There are a handful of industries that do NOT benefit from competition (electric generation and delivery for instance) and that the government should take an active role. Medical insurance is one of them. Want competition? Force private companies to compete for clients with a national medical program.