The Largest Health Insurance Firms in the US Essay

The Largest Health Insurance Firms in the US - Essay Example If ObamaCare succeeds in creating oligopolies, the insurance sector may experience some problems for example high operating costs and premiums, low-quality service and less innovation that would 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 necessary as it guarantees the proper performance of insurance as opposed to an oligopolistic market scenario.Conversely, the creation of oligopolies would also benefit 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, mergers would attract more customers compared to independent insurance firm s. The interest of shareholders is to reduce overhead costs in administration and other expenses. Consolidation of the insurance industry 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 vast resources that are available.