Tuesday, May 5, 2009

Just forget national health care

The only thing I really liked about the Obama plan for reform of health insurance was the idea of creating a government sponsored health insurance plan to compete with private insurers. As you would expect, the privates freaked.

Competition makes for a great sound bite, but not when you know you're sure to lose. The privates, and their allies in Congress, are complaining that a government plan would put private insurers out of business and lead to a single-payer system. Oh, my! Wouldn't that be a shame!

Chuck Schumer has proposed a "compromise," which would require the government plan to be self-sustaining, paying claims from the premiums it collects; not require doctors and hospitals to participate; pay more than Medicare; and, like private insurers, maintain a reserve fund.

Somehow, I don't think that will satisfy the private companies -- unless they are guaranteed the right to profitably cherry-pick the healthiest health care consumers and dump anybody with a serious or chronic medical problem on the government. Without that provision, they still would be at a competitive disadvantage merely because their shareholders expect them to turn a profit.

A system in which the government insurer is stuck with everybody likely to make a major claim isn't viable. The government plan would become too expensive for employers to purchase for their workers, too expensive for individuals not receiving sizable government subsidies, and hence too small to bargain successfully with doctors, hospitals, and pharmaceutical companies.

Without a genuinely competitive government sponsored insurer in the mix, the Obama plan is nothing but a giveaway to the insurance industry. Government subsidies provided to the uninsured poor would go straight into private pockets, and the expense of making sure everyone required by law to buy insurance does so would become a taxpayer sponsored engine to churn new business for the private companies.

Personally, I'd prefer to see no health care legislation at all over a giveaway to private health insurers.

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