A subsidy is a form of financial aid that is intended to promote economic activities in certain segments. Insurance, on the other hand, is a financial product that is sold by insurance companies in support of your life, property against risks such as damage, theft or loss. Private insurance is a protection that is provided by non-governmental companies such as an insurance company. When government programs involve a subsidy to a certain segment of the society, it becomes easier to access certain services that are subsidized by the government as preferred to accessing these services from private companies. Insurance on a subsidized basis, for example, is fair and enables people to sign up for insurance services especially health insurance. Subsidization on health sector enables people to get access to medical services. Private insurers have higher changes when it comes to health insurance and this limits accessibility of some services. Subsidized health insurance will minimize the cost provided in private sectors such as hospitals, and it will also enable access to quality medical services.
Unrestricted price competition among insurers could be detrimental to the public because it will give a chance for private insurers to set lower prices than that offered by the government. This results to unhealthy competition among the private insurers and the government. Anti rebating laws should be repealed because it poses unrestricted completion and this impacts on the service provision. It is important to note that insurance companies tag prices to the quality of insurance service. When there is unrestricted competition, most private insurers will resort to attracting more customers by reducing the prices and offering poor insurance service. This poses a risk to the government subsidy because people will neglect the government subsidy for private insurance which is subject to changes anytime. In my opinion, there should be a restriction on price competition to promote healthy competition among the pool of private insurers.
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