Reasons for Privatization of Insurance

According to the Families USA website, most Americans are part of private health-insurance plans, which are plans the government doesn't fund. Populations may choose to privatize their health-care system for health, financial and logistical reasons.

Choice

• Under non-private insurance plans, the government can dictate which insurance provider people can use, what rates they pay and what coverage they receive. Privatization lets people decide for themselves where they'll get assistance, what premiums they can afford and whether a policy suits their needs.

Rates

• Under non-private insurance, the government may decide insurance rates. Private insurance, in contrast, lets insurance companies compete with each other, in turn allowing clients to shop for a cheaper rate.

Citizenship and Jurisdiction

• Government-funded insurance sometimes applies only to registered citizens of a jurisdiction. As a result, legal residents who have not yet become citizens may be left without coverage. The private market makes insurance available to anyone who can pay the premium---the disadvantage, of course, being that poorer classes may not be able to afford the premium.

Lack of Other Funding

• In countries where government resources are limited, private funding of insurance may be the only way insurance companies are able to obtain the funds necessary for operation. This situation is relevant especially in high-population nations, since a higher population means that the government would need to fund more consumers.