He’s right. This isn’t insurance. Not even close.
Government officials are becoming more unhinged by the minute. Obama Effect for sure.
Insurance is the monetization of risk. Risk is the chance of loss when such chance is probabilistic. So charging a flat annual fee (in monthly installments) to cover, among other things, fortuitous accidents is, in essence, insurance.
What if the doctor were, in reality, running an intentional or unintentional Ponzi scheme by charging less than it cost to provide services? Very quickly he would run out of money and go bankrupt. This would leave patients in the hole to the extent of their prepaid premiums. And by relying on the good Doctor, they would have no other insurance. This is why insurance is regulated.
But I do believe that the State has put formalism ahead of logic. The fact that payments are monthly (I assume) removes the most serious consequences of inadequate pricing. It is an insurance-like service that is being provided. But it does not trigger in a serious way the concerns insurance regulation is intended to deal with.
Key observation.
It is because There's few limits to their authority. The presumption of enumerated powers of government is pretty much gone. Many officials, from the local queen bee at the town hall to the State and Federal bureacracies, feel that if they say it, its the law unless some other more influential politician or agency says otherwise. If you don't like it, tough... go to court and fight government paid drone lawyers... with the high costs and lengthy delays. Good luck in anything but the clearest cases, because of the politicization of the courts, too. And, for the official... the consequences of a reversed decision are minimal.