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My father used to be on the board of a local hospital, 10 years ago we discussed HMO's and private insurance, here's my understanding of what he said.

HMO's aren't charging enough now to cover costs when the members get older and costs rise HMO are either going to have to charge more, drop clients, or go out of business.

Private insurance policies rise every year, as the price goes up healthy people switch to new less expensive policies. Sick people don't qualify for the new policy and stay with the increasingly more expensive plan. Eventually only very sick people are in the plan, the plan is then cancelled. No laws are broken because no one is kicked out, the entire plan is gone. Now the sick people don't have insurance.
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