Actually, my animosity towards insurance companies is born of close experience with the industry. I am licensed in all 50 states and manage over $100,000,000 a year in insurance premiums (all commercial lines and health insurance).
I have a problem with the companies that have 60% plus market share and use the state legislatures to set rules that limit competition, raise prices and protect their monopoly status. Do you think the Blues contribute large sums of money to both Democrats and Republicans for any reason other than to protect their market share?
Insurance is not the best way to pay for your everyday health insurance costs. As someone pointed out earlier, it's like asking your auto insurer to pay for your oil changes, tune-ups, and gas. They don't process paperwork for free and when you spend their money they are going to want to tell you what you can buy, where you can buy it, and how often you can get it. And from your perspective when the oil change is "free" you will get one as often as you can and you don't care what the Quicklube charges. Things get out of hand pretty quickly.
Medigap policies are a pretty good deal but they don't compare to a major-medical policy that can provide millions of dollars of benefits over someone's life time (or even in a single year). It's a defined set of benefits providing relatively limited coverage and is like comparing apples and oranges.
The bottom line is this, we don't use insurance as insurance in the health care world - it works more like an entitlement. The people with copays and limited deductibles don't buy health care the same way they buy groceries. As a result, costs go up and there is much less incentive to improve quality. Name me one other industry where improvements in technology actually decrease productivity and increase cost. Second, insurance regulations are driven by people who want to make really bad public policy because they think the government should manage health care and by insurance companies who want to protect the current way of doing business to block other more cost-effective solutions from coming to market. That is not class-envy it is merely an acknowledgement that many existing large companies use regulators to block out competition and that is one of the major reasons that government needs to stay out the business world.