Neo, I skimmed your post on insurance and you make some good points, especially with respect to the potential shortfalls of a national health care system.
On the other hand, you may be expecting too much of the free market system when you write:
"So you and your friends should go and start either a completely non-profit, or a modestly for-profit insurance company that instead offers good coverage, and freaking put the others out of business.
Please tell me why you are not doing this?
That is what free enterprise is all about. If you offer a better product at better prices, you win, and make money doing it besides."
The sad truth is that for decades insurance companies were exempted from antitrust laws. They conspired to fix prices, divide markets and engage in collusive behaviors that would have landed them in jail in any other industry.
More recently they have been subject to antitrust laws but they have very well organized trade organizations and huge lobbies. There are relatively few of the huge insurance interests and they are still able to combine their huge resources to lobby and share "trade information."
A couple of decades ago I read that one in ten dollars spent in this country went to an insurance company. I don't know what it is now but I know that insurance companies own all kinds of corporations and control all kinds of resources. The lobbying power of the insurance industry is absolutely stunning and they spend huge amounts of dollars with press releases, advertising and notes in your bills telling you how good they are and how bad those mean attorneys and their "I've got a hangnail, make me rich" clients are.
It takes a huge amount of capital and a large pool of clients to share the risk in order to enter the insurance market. Those are some substantial barriers to entry and they know it. In the past they've punished those who would compete by price cutting, taking losses and driving them out of business.
In many ways they are the new oil barons, only this time they own the Madison Avenue marketers who deflect all blame from them.
There is an insurance crisis in this country and it's not just health insurance. It's malpractice insurance, auto insurance, health insurance, property insurance, worker's compensation insurance and a lot of other insurances. Add up how much you're paying in total insurance, compute in the amount you're paying extra for goods and services from those whose costs are much higher because of high premiums and you'll have an idea of the tremendous impact insurance has on our society.
Some people say it's a result of lawsuit crazy Americans and the poor insurance companies are simply struggling to get by. Other's point to the fact that they don't open their books but their profits are record setting while they claim to be struggling.
I don't know the answers but it's interesting that our wonderful legislatures across the country and in Washington address the issue by attempting to limit the amount insurance companies have to pay OUT, never seeming to deal with the issue of whether they are inefficient, anti competitive and in need of more regulation.
That makes a lot of sense when you realize what would happen to the total campaign contributions of the average legislator who failed to play ball with the insurance companies. A huge amount of corporate and management money would dry up and find its way into negative attacks.
So, after this long and rambling message, I guess I'm saying we better not look to the "free market" to fix any problems anytime soon. Ed |
