The Largest Health Insurance Firms in the US Essay

The Largest Health Insurance Firms in the US - Essay ExampleIf ObamaCare succeeds in creating oligopolies, the insurance sector may experience some problems for example extravagantly operating costs and premiums, low-quality service and less innovation that would some otherwise improve service provision. The merging of the firms would significantly reduce competition. In a non-oligopolistic market, insurance firms strive to gain competitive advantage over other fellow service providers. Providing quality service at affordable prices is an essential competitive advantage. Therefore, competition is needed as it guarantees the proper performance of insurance as opposed to an oligopolistic market scenario.Conversely, the creation of oligopolies would also make clients and shareholders. If insurance firms come together to form a single commercial entity, the standardization of benefits that accrue to clients would be possible and premiums may be adequately controlled. As a result, m ergers would attract more customers compared to independent insurance firms. The interest of shareholders is to reduce overhead costs in administration and other expenses. Consolidation of the insurance fabrication would initiate a centralized administrative system that would control the firms under the oligopoly and reduce the subsequent administrative costs.In addition, ObamaCare advocates for extensive consolidation of hospitals and health care services. Large health care facilities are in a better position to provide quality services and maintain best practices by use of the large resources that are available.