Insurance companies terrified of public option

terrified, and for good reason. Their goose - the one that’s been laying platinum eggs - is about to be slaughtered.

Should the public option survive in the health-care reform bills now being badmintoned around Congress, insurance companies and their pals the HMOs face catastrophe: Their obscene profits could vanish. The hundreds of billions of dollars skimmed every year from America’s insanely jerry-rigged health-care system are on the verge of being re-routed back into the system itself, and used to provide - you’ll never guess - health care: The 20 to 30 percent of all health-care expenditures that has been going to these insatiably ravenous companies should more than cover the cost of providing care for the almost 50 million Americans who now have none.

And they know that, should the public option, under which the federal government offers health-care coverage, become available, people will sign up in droves, in hordes … en masse; Estimates hover around 120 to 130 million. Almost, but not quite comically, these figures are employed by opponents as arguments against the public option: If we implemented it, why, a lot of people would want it!

As always, for the most clueless, abstracted and purblind assessment of just about anything, go to George Will. And sure enough, he came through again: In the Washington Post he explained that government shouldn’t be allowed to compete against private insurance companies because, well, government would do it so much more cheaply, and that would be - no, really he used this very word - “unfair”:

“Government is incapable of behaving like market-disciplined private insurance. Competition from the public option must be unfair because government does not need to make a profit and has enormous pricing and negotiating powers.”

See related from Arthur Salm:

American vs. European health care - Part I <1>

American vs. European health care - Part II <2>

Let’s make the HMO’s disappear <3>

It’s no wonder that these besieged companies are lobbing salvo after salvo of misinformation into the infosphere, and instructing their bought-and-paid-for congressional toadies to fill the air with chaff. After all, they stand to lose, over a period of not that many years, trillions in revenue. Their corporate officers gorge every year on salaries, benefits and stock options worth tens of millions. Of course they’re going to fight, and fight dirty. Of course they’re going to demonize their opponents. Of course they’re going to try to scare the bejabbers out of everyone. With dough like that at stake, what insatiable, conscience-free, greed-headed monster wouldn’t?

Their main fright tactic is the horrific specter of the government making decisions about what kind of health care you’ll receive. There is, as it happens, nothing in the public option plan that remotely suggests such an arrangement; even in countries with national health care, only doctors make those calls. (Even if it were true, and it most certainly is not, which would you prefer - an impartial “bureaucrat” deciding your medical fate, or an insurance company that makes money every time it denies a prescription, a test, a treatment, a hospitalization?)

Another bugaboo being tub-thumped is the one about how the government mishandles everything. Last week, House minority leader John Boehner (R-Ohio) suggested to Americans that if the public option goes through, we could be stuck with a health-care system run as poorly and inefficiently as the Post Office and the DMV. Now, I haven’t been to the DMV for a few years, but the few times I’ve been there and had to wait, it’s hardly been intolerable; the horror show of the various DMVs - which remember, deal with every driver and every vehicle in every state - is largely an urban myth. And, right, the hideous post office, staffed by all those polite, hard-working people - many of them veterans - who will take a letter from my front door and deliver it to a house at the end of a gravel road in Maine for what is now the outrageous fee of 44 cents. Good examples, Congressman. (The outstanding health care that Boehner and his family receive is provided by the government , and except for that ghastly out-of-the-bottle-looking tan, he appears to be pretty fit.)

And, as those of us who have gone head-to-head with an insurance company know, they’re all about compassion, understanding, and efficiency.

One critique of the public option posits that it grades a slippery slope toward Single Payer - a Canadian-style system in which everyone has access to good health care as a right of citizenship, and health-care providers are independent, but receive payment from one source only: The government. (Medicare operates the same way.). The slippery-slope critique is quite possibly valid, because once some people are freed from the tyranny of health care determined by for-profit companies, and no longer face the terrifying prospect of having no health care whatsoever, well, a lot of other people - just about everyone, I suspect - will want in.

Damn right it wouldn’t be fair.

Arthur Salm is an SDNN columnist.


http://www.sdnn.com/sandiego/2009-06-22/news/arthur-salm-insurance-companies-terrified-of-public-option

BRAVO Mr Salm. Excellent points!

:fistbump:

the private sector so they don't have to compete. That's Nancy Pelosi's level playing field. I frankly don't get it. Once of the reasons to have a public option is to make the program more cost effective.

Public be damned.

In 2008 election cycle, these were her 5 top donor sources:

Industry

Lawyers/Law Firms $264,100
Securities & Investment $238,200
Health Professionals $213,450
Real Estate $179,432
Insurance $176,000

So far this cycle (2009/10 ) ( that means the first 6 months of a 2 year cycle )

Health Professionals $87,000
Insurance $35,000

Now we know that total lobbying includes much more than reported donations.
but notice that health professionals were # 3 in '08, now in '09 insurance
and health are 1 and 2 in rank.

Source:
Open Secrets.
http://www.opensecrets.org/politicians/summary.php?cycle=2010&type=C&cid=N00007360&newMem=N

If you have to insure the "risk" of poor health, then you can only profit by insuring healthy people. The way to do that is to overcharge for every potential "risk" or else exclude risk altogether. The way to keep healthy people paying lower premiums is to group healthy people together in a low risk group, and the best way to do that legally is to make the employer responsible for controlling costs by not hiring people with chronic or pre-existing conditions and letting people go who are discovered to have chronic conditions or pre-existing conditions.

It is utterly shameful that in the U.S. your employment is a condition of your health, and vice versa.

We CAN change it and we should.

Public Option = dumping ground for all the unprofitable people they won't cover.

Gotta have insurance companies keeping people from having their lives saved where it would inflict serious damage to the corporation profit motive... blah blah blah

most insurance is straghtforward. your house burns down, they pay.
usually your incentives and the insurance company's incentives are aligned. no one wants the house to burn down because insurance is usually sized to partially, or at most entirely, offset the damage done or the cost to replace/rebuild. it's rarely designed to produce a windfall.

moral hazard is usually on the part of the insured, who no longer faces the full cost of a fire and therefore might not be as diligent in avoiding fires. similarly for auto insurance and so on. the insurance company rarely has any moral hazard on their part, because they don't prevent you from having a fireplace or cooking on a gas stove or smoking in your house.


health insurance is a different animal. the insurance company has many incentives to steer you towards inferior care. among the big problems are that health insurance is not tied to life insurance, therefore they don't bear the cost of you dying. in fact, they save money if you die because they no longer pay for a protracted illness. so they have an incentive to deny life-saving treatment. another big problem is how health insurance is so tied to employment. they know that you might switch jobs, lose your job, or that your employer might switch carriers, and therefore in the future, you might be someone else's problem. that means they have an incentive to deny your claim even on something that would prevent a bigger problem later, in the hopes that that bigger problem will hit a different insurance company.

i don't think any other form of insurance has moral hazards like this on the part of the insurance company. they literally profit by harming their customers.

i think the private insurance industry has proven that this is NOT something that should be for-profit at all, at least not without far greater regulations and restrictions than we have today.

But then their business does not involve ignornant beancounters practicing medicine without a license.

the acceptable standard of health care. http://www.wisecountyissues.com/?p=62 And those who are terrified claim we have the best health care available in the world. We must have health care reform NOW!

Are doing quite well with the existence of the Unites States Postal Service. (USPS)

Last I checked, all of them were doing just fine.

Stop whining, cry baby. :nopity:

http://www.usps.com/communications/newsroom/postalfacts.htm

They get a letter from Anchorage to Miami in 3 days in good condition. That's one out of 200 BILLION packages. They handle $75 billion in revenues (metered out largely in tiny increments, like $.44 at a time)! They have HALF A MILLION employees and a motor fleet of over 200,000!

And they do this on ZERO tax dollars.

Shut the fuck up you dumbass!

because sanity would take away their 'free' profits.