I'm not quite sure how that works in Switzerland, but I can't see it working here at all.  I'm pretty sure all of the shareholders of the insurance companies would be opposed to turning the company into a not-for-profit business.  If there were any such provision in the health care bill, there would be a massive sell-off of stock in those companies and they would become worthless. 

Without the profit incentive, it would be difficult if not impossible to raise the capital you would need to start a new insurance company.  Who would pay the reserve deposits required to make sure the companies remain solvent?  Without them, there is a risk that an insurer would become insolvent and not be able to pay claims, so there would be a real risk in buying insurance from a non-profit insurance company.

Although a non-profit can still pay salaries and bonuses to executives, it seem like it would be tough for a non-profit to be able to generate enough business to adequately compensate executives.  Without experienced insurance professionals to run the business, it is unlikely that they could be very effective and it would increase the risk of insolvency even further.  Though I can see that highly compensated executives may be a problem in the insurance business, without some balance it would be difficult to attract the staff they would need to operate.

I'd much rather see something done to control the cost of the medical care that would allow a traditional insurer to operate and make a profit AND bring down the cost of premiums.  But, I'm not really sure who that can be accomplished either.

Best,
Robert A. Franco
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