Saturday, August 15, 2009

Misinformation Volume III

The third piece of so called misinformation is that the public option will put private insurance out of business. Obama says this isn't true, so I guess that's the end of the argument, unless of course we want to do the unthinkable and apply some logic and deductive reasoning to the situation. How very unamerican of me.

Competition is a good thing, it is the cornerstone of capitalism and controls costs by giving the people an option and the companies an incentive to keep costs low. Competition within the insurance industry is good as well and the industry is seeking to eliminate waste and reduce costs because there is not a current monopoly. There are several different companies all competing for the same market share and good coverage at a reasonable prices is what they are all striving for. So I'm not averse to fair competition; as a capitalist I know we need it to keep things working the way they should. But we need fair competition.

The big problem with the public option competing with the private sector is that the public option will be non-profit while the private sector needs to make a profit, therefore the private sector will not be able to compete with the public option on price, but never fear, there are other ways to compete, right?

The private sector could offer different types of plans, setting themselves apart from the public option and giving people a choice -- Or they could if HR 3200 didn't specify that they will have to offer what is deemed "acceptable" by the same people writing the public option.

The private sector could continue to work with companies who decide to be self-insured and change their line of business to administering these plans -- Or they could if HR 3200 did not give government the right to decide whether or not a company can self-insure.

So by page 24 of HR 3200 the real competitive options have already been eliminated by dictating what insurance will have to cover, and by taking the option of self-insuring from other companies. After those two options for competition are eliminated, what is left? Not much.

The bill is not written with the statement that private insurance will be eliminated, but the 5 year grace period for employer based benefits before they must comply with government "standards" and the limitations it places on competition will lead things in that direction.

Ignoring the fact that there is a possibility that the public option will drive private insurance companies out of business is irresponsible and short sighted. President Obama uses the Post Office as the shining example of competition between the private sector and a public option, but let's not forget that the post office is bankrupt and continuously raising prices; is this what we want for our health care? So maybe there is hope. If the public option in health care works as well as the post office then there won't be a problem, but on the other hand, the post office doesn't dictate to UPS and FedEx what services they have to provide or how much they can make. Nor does the post office give themselves the prevent private companies from using other carriers.

Where it not for the language in HR 3200 which limited the options for competition I would not be worried, but that language is there; and as long as it is I will see an uneven playing field designed to make one side the winner and one the loser.

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