Oversimplification

Obama recently said there needs to be more health insurance companies, thus creating competition, in order to reduce the cost to consumers. Of course, that makes sense, we all know that competition makes prices go down, right? Until you dig deeper. Health insurance companies are essentially middlemen, and are kindof like unions. A strong middleman will be able to negotiate a good deal from the provider, a weak middleman will get a crap deal. This gets passed on to the members/consumers. So, more competition between these middlemen, a whole bunch of weak instead of a few strong, doesn't yield that price-reducing effect. Just something I hadn't really thought about before. Things are always more complex (and yes, my description here is still oversimplifying things).