Then why was there so much support for it? Answer, by forcing younger people to pay for insurance and then having the government subsidize the purchase they would make out okay on this.
By your logic, the insurance industry is suicidal, because the intent of ObamaCare, when all is said and done, is to create a single-payer system (i.e., government insurance), which would necessarily eliminate private insurers.
Also, HMOs are not insurance; they are a health care program covered by insurance, as are PPOs (which are far superior to HMOs, in my opinion).
It kind of reminds me of when auto liability insurance became mandatory: It was the government and the plaintiff’s bar who demanded that, not the insurance industry. Ditto Uninsured/Underinsured Motorist insurance.
In short, the government required private insurers to write insurance for bad risks.