I think the best thing you can do for health care is have a baseline option that is given to everybody, and make the private people compete for customers to switch to their service instead. That’s the general idea behind having a “public option,” and why it’s so important. Creating competition is a way of partially sidestepping the insurance lobby—the government forces them to change their way s not directly, but indirectly by leveraging the free market.
Yet for some reason many opponents equate a government-provided option with anti-market maneuvering, even as the established insurance interests enjoy a noncompetitive marketplace. It is the government’s job to ensure that the market stays competitive, because competition is good for individuals, not to mention the cornerstone of a free market system. What we are seeing here is the insurance industry using its powerful lobby to protect its monopoly status. Regulations are great for corporations, because they can either find workarounds or lobby the right politician to create a special loophole or exception for them.
Contrast this with the idea of a public health care option. In this case, the government decides what the minimum requirements for a health insurance policy will be, and provides those benefits itself. Some of the benefits being discussed are things such as repealing the discrimination based on preexisting conditions. If this is something people value, and the established insurance companies refuse to offer it, the majority of people would switch to the public plan. Suddenly those insurance companies would begin losing money, which means they would have to provide additional benefits, dare I say compete, to get those customers back.
This is a good thing for the customers, and exactly why the insurance companies don’t want to see this happen. By having a public option, the government gains power over them. They can dictate the minimum benefits of all insurance policies simply by changing what the public option provides. In the end, though, the insurance companies aren’t going to lose much money at all. They’re going to have to make changes to remain competitive in this new free marketplace instead of their comfortable monopolies, but they will almost certainly end up with as many customers as before. They’re pretty much just whining because they have had it good at the expense of “we the people” under the current system, and making changes shifts some of that power back. This is by and large a good thing.
The end result is that people still get to keep their favorite private insurer, only now they get more or superior benefits for the same price. Every person who does this saves the government money, so it only has to subsidize the public option for the people who can least afford it. This is a good thing, because when these people have insurance, they will be able to get regular preventative care and outpatient medical attention, meaning that ERs (especially those in cities) will be free to deal with real emergencies instead of serving as a primary care provider for the uninsured. Having more people insured means hospitals will lose less money, driving the costs down for everybody. More people receiving preventative care means more people will stay healthy, be able to work more, and ultimately spend more.
Providing for the basic needs of people is better for everyone in the long-term, just like maintaining a competitive marketplace keeps quality high and prices reasonable for everybody. Why are we having such a hard time passing health care reform again?
4 responses to “Thoughts on Health Care Reform”
One possible problem, If the insurance companies know that their customers aren’t going to leave in the first place because they think they’re going to get better rates do the the competition, why would they lower their rates by much.
Because if they don’t, those customers will quickly realize it’s much cheaper to go with the public option, and leave.
It’s a usually a good rule of thumb that when the established industry lobby is dead set against something, it’s probably great for the customers. Government serves to protect the people. Corporations will always be able to find ways to make money – and if they can’t adapt, they don’t deserve to stay in business.
“Contrast this with the idea of a public health care option. In this case, the government decides what the minimum requirements for a health insurance policy will be, and provides those benefits itself. Some of the benefits being discussed, such as repealing the discrimination based on preexisting conditions. If this is something people value, and the established insurance companies, the majority of people would switch to the public plan. Suddenly those insurance companies would begin losing money, which means they would have to provide additional benefits, dare I say compete, to get those customers back.”
Someone needs to do some proofreading. 😉
Otherwise, while that makes sense on paper (or my screen), I wonder just how well it would actually work and how long it would take before it becomes corrupted and bloated like most things our government does.
For all of the government involvement, Medicare works out decently well. They certainly give their beneficiaries better coverage than most insurance plans today.