Understanding Health Insurance
by Larry Perrault on August 24, 2009 at 3:25 PM
What I fear is that Democrats will appear to have backed off enough to get the health care measure passed, possibly even with some Republican support, but will still manage to plant a seed that will grow into government controlled health care.
An "independent" entity that is still government regulated and/or funded, similar to Fannie Mae and Freddie Mac in the mortgage industry, will still lead to crises that will beg for increasing government intervention.
On Sunday, North Dakota Democrat Senator Kent Conrad said that there aren't enough votes in The Senate for a public option on health-care. He said that the idea of Independent co-ops that he raised weeks ago, would be government subsidized on the front end with the hope of soon pulling out. Soon, huh? Sure, you bet I'll roll the dice on that one!
What is needed is:
1) to keep the government camel's nose from under the tent in health care and to call on all Republican legislators to steer clear of it. If Democrats can pass it, let them own it.
2) to understand that a great deal of this talk about "insurance reform" is not really talking about "insurance" at all.
Insurance companies are supposedly evil because they try to cover only legitimate claims? Or because they don't cover "preexisting conditions?" If they covered preexisting conditions, why would anyone buy insurance before they were sick or hurt? And if they are made to be unmindful of illegitimate claims and/or to cover preexisting conditions, how in the heck will premiums not skyrocket? Imagine if you could go to the auto insurance company and demand coverage after you wrecked your car! I realize that people will see their health differently from auto service. But nevertheless, we are not really talking about insurance.
They are making insurance companies out to be wicked as though they are making unnecessary profits. But, if managers and salespeople can't profit there, they will just look elsewhere. And, companies will be managed and represented more poorly. I'm just a former salesman but I knew well before then, that markets don't work that way. What they need is to open private markets as widely as possible, such as across state lines, and let individuals drive the market more than employers OR government.
When I was a salesman, I started in a specialty computer vertical market in 1987. At that point, there was tons of profit margin between the manufacturer and the end-user. As a distributor, we made 35 or 40%, and a dealer also probably made a large margin as well. Why did the manufacturer give that margin away? Because with a specialty market, they need both regional and local agents to energetically represent the product. Six years later, the market and the technology were so mature, that only a single level of distribution between manufacturer and end-user made 10 or 15%. The market dictates.
Medical care in The United States is expensive because
A) people quite understandably value it highly
B) It's the best, most cutting edge medical care in the history of the planet, precisely because there is a lot of money poured into research in a market for a product that people value highly
If you kill or degrade the market, the innovation will be drastically diminished. And say what you will about "death camps" and abortion being in no bills: If government demands universal coverage, abortion-seekers will not be denied, and care will be rationed! That and importing lower cost (lower-trained?) providers after domestics have been chased to other fields, are the only ways they can reduce costs, which after all along with universal coverage, supposedly were Obama's top two priorities. The only other way to minimize cost is to maximize private competition.