December 26, 2006
-- by Dave Johnson
With a Democratic Congress coming in January, obviously several health care plans are going to be introduced. Here is some free advice to legislators. Don't even bother including private insurance companies in your plans.
Conventional Wisdom thinking is that you have to include private insurance companies in any plan, or they'll put so much money and effort into opposing your plan - and you - that nothing can pass. In the 90's the Clinton administration offered a comprehensive health care plan that involved private insurers instead of a "Medicare-For-All"-style national health plan, hoping to ward off industry opposition. This was an example of what I call the "Afraid Rush Will Say Something Bad About You" syndrome - the point being that Rush will say something bad about you anyway, no matter what you do. And of course the private insurance companies did oppose the Clinton plan anyway, putting so much money into opposing it that it never even came up for a vote. The effort went beyond just opposing the plan and became personal, with smears and take-no-prisoners tactics directed against anyone involved in trying to bring health care to the public. So much of that money and venom was left over that it helped bring in a Republican congress the following year.
So here is some news for Democrats who are offering health care plans that offer tribute to private insurance companies: They are going to oppose your plan.
Do you think that it is more efficient to use a private insurance company to provide health insurance? Then take a look at what the big corporations do when offering health insurance to large numbers of employees. The big companies "self-insure." They set up their own little internal national-health-care plans for their employees and administer them themselves rather than use private insurance companies because private insurance companies cost too much. Face it: Medicare-For-All is the only plan that will work. These days the private insurance companies are designed to deliver profits and enormous CEO salaries, while delivering the absolute minimum benefit to the public that they can get away with without personally being put in jail -- fines and civil judgments being already factored in.
Do I have a low opinion of insurance companies? You bet. Am I alone? Discuss.
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The story behind this, and all the pain that's been caused by the health insurance mess in this country, is as simple as can be, yet very difficult to explain. Insurance is a gamble. It pays off because most people never use it. The bigger the pool of insured ( most of whom will never use their insurance anyway or will only make small claims) the bigger the profits, and the safer the insurance plan. Got that much? Think about it. That's why BIG insurance plans that cover everybody work efficiently. It's not socialism. It's the rules of the game.
Once upon a time, long long ago, this country had a system in which each state had its own non-profit Blue Cross and Blue Shield health plan. Employers signed up its workers in these plans. It was pretty much the rule that if you had a job you could get affordable health insurance to cover yourself and your family. This wasn't quite as efficient and inexpensive as a national plan would have been, but for the most part it worked quite well because the insurance pools consisted of the vast majority of employed people in each state.
Then the private insurance companies got greedy and decided they were missing out on a good thing. Actually, they weren't, and rather quickly realized it. Health insurance is one area in which competition doesn't work well. You need an awful lot of people who aren't going to need to use their insurance to cover the expenses of those who will need to use it, and the fewer insured you have the less profit you're gonna be able to make.
Once again, stop and think about this. The insurance companies certainly did, once they realized the problems they were making for themselves. And the states had to think this over too, because Blue Cross/Blue Shield found itself stuck with the expensive, problem cases the private companies refused to take. And when you get down to it, Medicare isn't a good insurance plan, since it's only insuring a very high risk group and most of its members are going to need to use their insurance. The result is that, at this point in time, health insurance is NOT a good deal for anybody. Not for the private companies because they compete with each other for a limited group of people and never have enough customers to actually be safe and certain to make a profit instead of a loss. Not for the government, which is stuck with the most expensive cases. At this point the only possible answer is some kind of national health insurance plan. Because of the way insurance works, not because anybody wants to be socialists. The private companies will kick and scream because they've solved their problem to some extent by (1) charging exorbitant rates and (2) excluding anyone who might actually be a genuine risk, brushing those cases off on the government when possible, or leaving them uninsured.
Once again, it's the vocabulary, stupid! You have to actually understand what's causing problems to solve problems.
Exactly. Wish the Clintons had taken your advice last time, and hope the Dems do this time around.
They may be aided this time by the fact the system is so broken it can't be ignored anymore -- and it's a real drag on the economy. Energetic young people with ideas can't afford to pursue their dreams by leaving the jobs that provide their health insurance for themselves and their families. Boomers who would love to retire from jobs that have grown tiresome -- perhaps to start part-time businesses of their own -- grimly hold on to ride out the years until Medicare kicks in, because of the sky-high cost of individual health insurance premiums a their age. It's a progressive hardening of the arteries of an economy that was long regarded as the most dynamic in the world. Want to jump start the economy? Unclog our economic arteries with health insurance reform.
Posted by: Madison Guy at December 29, 2006 5:51 AM
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