The reason so many people villianize the health insurance industry is from the misguided notion that health care for those under 65 should be an entitlement.  It never has been that way in America and, despite the fact we have Obama in office and health care reform is actively on the table, it is unlikely to end up so.  Health insurance is a business, just like any other, and the players currently do a good job.  Yes, health insurance is expensive but insurance companies just pass along the costs and their profit levels are certainly in line with the rest of American industry.  The real driving force behind the cost of health insurance is the providers and pharmaceutical companies.  Have you ever examined a hospital bill?  If you have insurance, look at an 'explanation of benefits' to see how the insurance company manages to cut those charges down through negotiated rates (PPO) to the tune of 70% to 80%.  Have you looked at the retail cost of many brand name prescription drugs? Many are in excess of $200 for a month's supply.  Try to come up with a business model where the average customer costs $1,000/year and once every five years, on average, runs up an additional $100,000 in charges, and see where your premium numbers would come up.

The big problem currently is the system is unfair.  You can be denied coverage or given a wait for pre-exisitng conditions or charged more if you are not healthy.  The insurance industry is willing to do away with all of these things and treat everyone the same if everybody goes into the insurance pool---which means a mandate that all Americans have heath insurance coverage.  In this way risk can be actuarially calculated and fair rates can be arrived at for everybody.  From what I'm hearing there is a definite possibilty in the near future that if you don't have health insurance through your employer then you'll be required to pay for it on your own.

If you believe a government run plan would be less costly, consider the current government plan: Medicare.  If you are Medicare eligible you can elect to have a private insurance company provide you a better level of benefits than the government plan at no cost to you---this is called Medicare part C, or Medicare Advantage.  The government simply gives the insurance company the amount they have allocated for you to provide more benefits than they are able to.

We need the insurance companies, we need them to be profitable so they stay in business and we need several of them in the marketplace to insure competitiveness.  Without them the cost to your for your health care, whether it be through premiums such as for Medicare parts B and D or through increased taxation, will undoubtedly end up higher.