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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Lane3 who wrote (135042)	3/27/2010 12:29:08 PM
From: cnyndwllr	Read Replies (1) \| Respond to of 543150

"If the answer to the question is, indeed, that profit is the key underlying problem, then the solution is simple and cheap--make the insurance business non-profit. If the problem is price competition or something else and we still have price competition of that something else in the new system, then we won't have solved the problem." Lane, I'm never quite sure that I understand you so I'm not going to assume anything. Much of this you may find too obvious but, as you imply, obvious isn't embarrassing. So here goes.... If you're referring to "the problem" as the insurance industry practice of wrongfully rescinding policies, then making the insurance industry non-profit to take care of that issue would be like using a cannon to kill a mosquito. You could tailor that solution to fix the problem but why? There are a number of fixes that don't involve making the insurance industry non-profit. For instance, the new laws restrict the rights of all insurance companies to take such actions and, in the past, there were tort causes of action which made insurance companies very careful not to cross the line of wrongfully denying coverage. The profit versus non-profit discussion was relevant to the issue of driving down the cost of securing health care coverage. Those who wanted a public option or government supported insurance cooperatives wished to put pressure on the insurance companies to either lower their profits or increase their efficiencies in order to compete on price with a not for profit public option or cooperative provider. The consequences of failing to do so would be that the private companies would lose an ever increasing share of their market. In one sense the public option advocates were calling the bluff of those who claim that a government run insurance program could not compete with a presumably more efficient free market industry but their opponents argued that the private insurance companies could not compete with a non-profit public option because the government program wouldn't remain self supporting and would be propped up with tax dollars. According to them that public subsidy would leave us all with government run and government funded health insurance and the private companies would go out of business. There was more wrangling and they reduced the number of people who would actually have been able to tap into a public option program but even that was a step too far in the eyes of those protecting the insurance companies under the banner of anti-socialism, free market efficiency and preserving freedom. Of course it also preserved their freedom to pick up large reelection donations from the cash cow that the insurance industry is to certain incumbents. I'm suspect that won't answer whatever question you actually have but it's the best I can do. Ed PS, oligopolistic markets aren't necessarily bad, the problem is that they have the potential to behave badly and that's why we have antitrust laws and a federal agency to police them for anti-competitive behaviors. But, of course, our insurance companies aren't subject to federal antitrust restrictions.