Before you shed a tear for the insurance companies

It seems that opposition to a public health care plan is built around the assumption that the public option would drive private insurers out of business and force us all into a system of socialized medicine.

There are basically two thoughts about how this would happen. One is that President Obama was born outside of the United States and harbors secret socialist fantasies. He will work, so the theory goes, to undermine private insurers. Promoters of this theory point out that Obama once said that if the U.S. were starting from scratch he would favor a single-payer health system.

This is the same point The Economist magazine made recently:

If he were starting from scratch, there would be a strong case (even to a newspaper as economically liberal as this one) for a system based mostly around publicly funded health care.

Of course, the U.S. is not starting from scratch and Obama has said that he wants a system of public and private insurers offering a choice of health plans much like the options available to members of Congress. Obama has also appointed people to powerful positions, like Zeke Emanuel, who think that even if the U.S. were rebuilding a health system from the studs, single-payer would not work well.

The second theory is that the government plan would not compete fairly against private industry and large insurance companies would go out of business with all of the federal favoritism.

The trouble with this argument, as the Urban Institute has noted, is that Congress often favors private industry over government programs. The feds have paid private Medicare Advantage plans more per enrollee than it pays traditional Medicare to give a boost to private companies. And the federal government hasn’t shown much interest in allowing private industries to collapse (see banking and auto sectors).

Obama says that he wants competition. That means that if the public plan is failing because of adverse selection it will probably get some federal funds. And if private industry is failing because of an inability to compete, it will also get funding. That’s the only way to preserve competition.

It is also bizarre that private insurance companies say they won’t be able to compete against the public plan. Even if the public plan is less expensive, private insurers say they provide superior service and that the public plan will require long wait times and other horrors. So, that means people will overlook the price tag of the public plan and continue buying private insurance.

I know that everyone reading this desperately wants Blue Cross and Blue Shield of North Carolina to survive as it behaves like a model corporate citizen. Well, I can assure you that Bob Greczyn isn’t going anywhere. Congress wants the competition.

4 Comments

  1. jacksmith

    July 20, 2009 at 3:24 pm

    AMERICA’S NATIONAL HEALTHCARE EMERGENCY!

    It’s official. America and the World are now in a GLOBAL PANDEMIC. A World EPIDEMIC with potential catastrophic consequences for ALL of the American people. The first PANDEMIC in 41 years. And WE THE PEOPLE OF THE UNITED STATES will have to face this PANDEMIC with the 37th worst quality of healthcare in the developed World.

    STAND READY AMERICA TO SEIZE CONTROL OF YOUR NATIONAL HEALTHCARE SYSTEM.

    We spend over twice as much of our GDP on healthcare as any other country in the World. And Individual American spend about ten times as much out of pocket on healthcare as any other people in the World. All because of GREED! And the PRIVATE FOR PROFIT healthcare system in America.

    And while all this is going on, some members of congress seem mostly concern about how to protect the corporate PROFITS! of our GREED DRIVEN, PRIVATE FOR PROFIT NATIONAL DISGRACE. A PRIVATE FOR PROFIT DISGRACE that is in fact, totally valueless to the public health. And a detriment to national security, public safety, and the public health.

    Progressive democrats the Tri-Caucus and others should stand firm in their demand for a robust government-run public option for all Americans, with all of the minimum requirements progressive democrats demanded. If congress can not pass a robust public option with at least 51 votes and all robust minimum requirements, congress should immediately move to scrap healthcare reform and request that President Obama declare a state of NATIONAL HEALTHCARE EMERGENCY! Seizing and replacing all PRIVATE FOR PROFIT health insurance plans with the immediate implementation of National Healthcare for all Americans under the provisions of HR676 (A Single-payer National Healthcare Plan For All).

    Coverage can begin immediately through our current medicare system. With immediate expansion through recruitment of displaced workers from the canceled private sector insurance industry. Funding can also begin immediately by substitution of payroll deductions for private insurance plans with payroll deductions for the national healthcare plan. This is what the vast majority of the American people want. And this is what all objective experts unanimously agree would be the best, and most cost effective for the American people and our economy.

    In Mexico on average people who received medical care for A-H1N1 (Swine Flu) with in 3 days survived. People who did not receive medical care until 7 days or more died. This has been the same results in the US. But 50 million Americans don’t even have any healthcare coverage. And at least 200 million of you with insurance could not get in to see your private insurance plans doctors in 2 or 3 days, even if your life depended on it. WHICH IT DOES!

    If President Obama has to declare a NATIONAL STATE OF EMERGENCY to rescue the American people from our healthcare crisis, he will need all the sustained support you can give him. STICK WITH HIM! He’s doing a brilliant job.

    THIS IS THE BIG ONE!

    THE BATTLE OF GOOD Vs EVIL!

    Join the fight.

    Contact congress and your representatives NOW! AND SPREAD THE WORD!

    (http://action.firedoglake.com/page/s/publicoption) (http://www.actblue.com/page/healthcareheroes)

    God Bless You

    Jacksmith – WORKING CLASS

  2. Kimberly

    July 21, 2009 at 8:59 am

    Insurance companies are a primary factor of our current health care crisis. My personal opinion here is that insurance companies need to be honest and fair, stop refusing coverage and pricing insurance out of reach for those with pre-existing conditions, stop their practice of “purging”, stop denying treatments based on cost, and if they can’t or won’t then let them fall just as many other companies have. The Feds can then take them over just as they have banks. I will never shed a tear over an insurance company falling. Great idea here, let’s make the CEO’s give their bonuses to support a National Public Health Plan. “Non-Profit” insurance companies can turn their profits over to the National Public Health Plan and that would pay for the care of those they have denied, purged, and priced out.

  3. LauriePartrdge

    July 21, 2009 at 11:15 am

    To Jacksmith and Kimberly comments I can only add: AMEN!

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