Health Affairs tells the truth and shames…well…
Unlike for-profit firms, a public plan has no incentive to cut corners and prevent providers from giving their patients quality evidence-based care, because its ultimate goal is public health, not private profit. Nor does it have any interest in sideswiping regulations and shortchanging consumers. Free market proponents argue that private health insurers should be lightly regulated to give Americans the best value. We have seen the results of that sort of regulatory neglect in many industries in the past eight years; the harm to all Americans, businesses and the overall economy could not be more profound.
Read the Whole Thing, since you probably won’t find it being cited at The Atlantic.
UPDATE: Bonus quote, since it gets to the core of the matter:
[Health insurance is an] oligopoly [market] with high entry barriers in which prices and profits have escalated rapidly.
Traditional economic theory holds that there are no economic profits in a true market.* That the Health Insurance industry has realised higher profits while spending a lower portion of each dollar received on claims over the past twenty years is, economics tells us, an indication of market failure. Strangely, the mass of economists don’t seem to be saying this. Which is a market failure of another type.
*There is, of course, a fair Return on Investment embedded in the equation, but that is assumed to be the stable risk-adjusted return, not increasing in an equilibrium state.