Why do the government subsidize insurance companies.
The subsidy is the process of providing a sum of money by the government to the firm or the individuals which can be used by the receiver to purchase the required services at lower cost. Thus, the subsidies provided by the government to the product or individual help to reduce the price of the commodities or services in the economy.
The health sector is the sector which is closely related with the human health and immunity. The human health is an important aspect where the government should give importance. The economies with advanced medical treatment methods will have higher medical expenses and most probably it will be a financial pressure on the normal individuals. Thus, the health sector of the economy faces some difficulties. The insurance companies are the Intermediaries who can assist the individual in his health expenditure and they will have pre-determined installment payments which enables the insurance cover over the individual or the family.
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