Coverage standardization would be an absolute game changer - but at that point that standard of coverage is being dictated by someone - either a cartel of the insurers or the government. It's much more likely to be done by the government but if that's the case then you essentially have medicare for all except you have a bunch of private bureaucrats in the middle draining money out of the system and adding no value.

If the precise definition of the product is dictated by the government then what differentiation are the insurers actually providing that adds value to the equation. Right now insurers actually do do a fair amount of good work trying to assess treatment efficacy and ensure that their customers get the best outcomes within a reasonable budget. If coverage is standardized then they're just acting as a pool of money - cash goes in, it comes out, occasionally one of the pools will go bankrupt and catastrophe will befall a lot of folks - or else the government will step in and save it so... why not just let the government run it?

> why not just let the government run it?

Insurer's roles would be marginalized to competing on doing just enough administration and estimating/negotiating cost/pricing.. They also would still have incentives to cut costs as they get temporary benefits of cost cutting until copied by the other insurers. It's not a lot but it is areas medicare has problems with (and pricing would get harder still without a reference private market) and retaining a private layer is more compatible with the politics of the US even when it is a pure cost.

Insurers have actuaries to make sure they don't go bankrupt. They would be plenty happy to just sit there as middle men skimming off a cut forever. With standardization of care it becomes a lobbing fight as every other player in the industry, plus various groups representing the public, are also working to get that standard to cover everything imaginable. This already happens with state minimum coverage requirements.