David :
Seems to me that criticism of private insurance companies in the
medical sector
--this has nothing to do with homeowner insurance, or
automobiles, or anything else--
is entirely justifiable. Generally I favor market solutions to
just about anything, but
here is a case , financial institutions is another, where the
market clearly has broken
down and the best available solution is the public sector.
The argument that a public option would destroy private
insurance companies is
false as I see it, for much the same reason that toll roads
and toll bridges
continue to exist despite the existence of the Interstate or ,
for that matter, other
public highways or bridges.
Consider these remarks from : Donald
Cohen, Executive Director, Center on Policy
Initiatives
in the Huffington Post for March 23, 2010, originally from last
year.
" Since health insurance costs are rising at nearly twice the
inflation rate, there couldn't be a more important time to eliminate
non-essential overhead through healthy competition. Families and
employers are being crushed under the burden of increased health care
costs. Since the year 2000, employer-sponsored health coverage premiums
have increased by 87 percent.
It's no wonder, though, that the Health Insurers are frantically
trying to head off competing with a public plan. Private insurance
overhead and profits eat up 20% and more of health care premiums while
Medicare overhead (and no profit) is closer to 3%. There is big money
to be made in health insurance. The top 7 "for profit" health insurers
made a combined $12.6 billion in 2007-- an increase of 170.2% from
2003. The same year, the average CEO compensation package for these
health insurance companies was $14.3 million. Pay packages ranged from
$3.7 million to $25.8 million. "
I simply cannot work up much or any sympathy for any business
which is usurious in essence
Moreover from what I have read elsewhere, insurance company
profits grew even more than usual in 2009 despite the recession for the
simple reason that several million people dropped their private plans
because they could no longer afford them, and many of this pool of
people were those with higher costs due to health issues. In such a
case inflation of profits is immoral.
There was also a Sanjay Gupta piece on CNN which showed the
obscene prices for medical equipment that are commonplace in the
"industry." And you thought that military toilet seats at $ 1000 were
bad, that kind of pricing occurs up and down the line for everything
from catheters to bedpans, Clearly hospitals, if not also doctors,
don't give a damn about such pricing ( even if some do ) and are more
than willing to require people to pay through the nose. Even if
families are bankrupted in the process. In what way is that good ?
The article below explains "public option" for anyone unclear on
the concept.
I am anything but anti-capitalist, but I am very much anti-gouging
and do not regard the government as evil by design. So, when a
government option can do a better job, OK with me.
Today about 17% of GDP goes to health care, twice the rate in 90%
of modern nations This trend has gotten worse with, ironically, more
competition, or presumably more competition, from the time about 20
years ago when it stood at about 10 %. The nation cannot afford more of
this nonsense and anything that will stop this is long overdue.
Billy
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OpenCongress blog
What is the Public Option?
August 20, 2009
- by Donny Shaw
The public option as proposed in the House health
care bill, is a government-run health insurance plan, like
Medicare, that would compete along side private insurers in a new
Health Insurance Exchange that the bill would set up. The exchange is
basically a place where people who aren’t on Medicare or Medicaid and
don’t have insurance through their employers would go to comparison
shop for a health plan. One of the plans available on the exchange
would be the public option. Like all plans on the exchange, the public
plan would have to meet certain minimum standards for care – minimum
services that must be covered, mental health benefits parity, a fair
grievance and appeals mechanism, etc.
The public option and the private insurers on the exchange could
still offer different levels of care – from catastrophic-only to
comprehensive – but plans would be relatively standardized by type so
that comparison shopping is easier for consumers. The exchange would be
available to the public as a website and a toll-free hotline, and would
be focused on making information about the plans more transparent.
Conservatives argue that the government-run public option plan
would drive private insurers out of business because, not being
burdened by the need to generate profit, they could offer the same
level of care at a lower price. They fear that this would happen to
such an extent that eventually there would not be any private insurers
left. Liberals on the other hand see the competitive advantage of a
public plan as a way to bring costs down throughout the industry,
thereby increasing the number of affordable health insurance choices
for consumers. Without the public option there will be no real change
to the current system that has kept health insurance out of reach for
millions of Americans, they argue.
Who’s right? The Congressional Budget Office (CBO),
a politically independent, non-partisan government agency whose job is
to provide economic data to Congress on the bills they propose, has
done some analysis
(.pdf) of the public option’s likely effects. This is as close as we
can get to an unbiased, scientific take. Based on how the CBO sees the public option working, it’s safe to
say that even if the conservatives are right and the goal is to crowd
out the private insurers, as written into the bill, it’s not going to
have that effect:
Another significant feature of the insurance exchanges is that
they would include a public plan that largely pays Medicare-based rates
for medical goods and services. CBO
estimates that the premiums for that plan would generally be lower than
the premiums of the private plans against which it would be competing.
Because all plans offered in the exchanges would vary their premiums to
reflect the costs incurred in each area, the difference in premiums
between private plans and the public plan would vary
geographically—but on average the public plan would be about 10
percent cheaper than a typical private plan offered in the exchanges.
That difference in premiums is itself the net effect of differences in
the major factors that affect all insurance plans’ premiums,
including their payment rates to providers, their administrative costs,
the degree of benefit management they apply to control spending, and
the pool of enrollees they attract (the effects of which would be
partly offset by the risk-adjustment provisions described above).
