The purpose of insurance is the sharing of risk. When you add the profit motive to insurance, you add a motive that is opposite of sharing of risk. The profit motive makes a profit out of the misfortune of others; the more misfortune, the more profit to be earned.
There are a number of human activities that do not lend themselves well to the profit motive, religion, charity, insurance, government, war and natural disasters. The GOP wants to apply free market capitalism and the profit motive to all forms of human activity. While a regulated free market and the profit motive may work well in some areas of economic activity, there are many areas as listed above where they clash with the goals that most people accept.
Self-insurers among the 1% see no need for insurance since they don’t need it and don’t want to pay for it for others in taxes.
- Obama slams Mitt on profit motives (politico.com)
- Out-of-state health insurers invited to Georgia, none accept (bizjournals.com)
- Profits, Competition, and Social Welfare-Becker (becker-posner-blog.com)
- 3 Reasons We Should Not Privatize Prisons (crimedime.com)