This is a complex and nuanced issue, so I just want to zero in on one talking point that I disagree with. The health care industry is fighting hard against a public option because they complain that the government does not compete on a level playing field. There is some truth to this, but I don't think it's entirely accurate.
First of all, consider one industry where the government offers a "public option" that competes directly alongside private companies: the carrier industry. When you go to ship a package, you can choose between several private companies like UPS or FedEx, along with lots of smaller local carriers, or you can go with the United States Postal Service. Everyone knows the difference in price and quality that this choice offers. The postal service is a little cheaper and sometimes not as fast or convenient, but for most people it's good enough most of the time. When you need more speed or reliability, you look at the private carriers.
Does the USPS compete on a level playing field with the private carriers? Not really. They can operate at a loss--and have several times over the years--without going out of business. But this has never threatened the viability of the private carriers. Rather, it establishes a benchmark of quality and price that the private companies need to exceed in order to maintain a competitive advantage. The government being what it is, this benchmark isn't too tough to beat.
No, the private carriers are usually much more concerned about the competition they receive from each other. UPS isn't trying to get you to switch from USPS, they want you to switch from FedEx.
As the above article indicates, this is the kind of competition that's lacking in the health insurance industry. Because so many health insurance markets are near monopolies, a public option wouldn't be introducing unfair competition--it would be introducing competition, period. The distinction is meaningless to the insurers, of course. However you define it, a public option will subject them to a level of competition they will consider onerous. But I think it makes all the difference in public perception. Most people probably wouldn't have a problem asking health insurers to compete for business in the marketplace the same way UPS and FedEx do. (In fact, most people probably assume they already do.)
Wednesday, July 22, 2009
Subscribe to:
Post Comments (Atom)
10 comments:
If you have a choice to go with the government health care plan or the private health care and if I choose Private then I don't have to contribute to the public plan, then I suppose I don't have as big of a problem. But if I have to contribute to both, I would have an issue with that.
One more thing that bothers me is what has the government done well? Why are they going to get it together magically with health-care?
I don't mean to say that the Government is not good for anything, I just believe a smaller government is much more effective than a government that tries have its hands in everything
I already discussed this with Dan in person, but I will follow up here just for fun.
I think that Social Security is a good model for what a government health plan could look like--and does look like in some other countries.
Besides the fact that we don't know how long the system will be solvent, the Social Security program has worked pretty well. It's kind of like a universal retirement program. Anyone who works and pays into the system will get Social Security payments when they retire or become disabled. (And the checks are never late or short.)
It's not much, of course, so those of us who are willing and able can choose to participate in private retirement savings programs, buy additional disability insurance, etc. But everyone gets at least the minimum government benefit.
This is how health care works in many other countries (like Canada, for instance). Everyone benefits from the baseline government plan, but those that choose to can go out and get private coverage on top of what the government provides, and many people do.
In other countries private health insurance competes in a marketplace unlike what we have here, resulting in a superior product. One feature common to Canadian health plans, for instance, is reimbursement of a portion of premiums if your claims don't exceed a certain amount each year. This provides an incentive for healthy people not to use the health care system needlessly "since they are paying for it anyway." There is no reason American health insurers couldn't offer a similar benefit, except that they don't have to, because they are basically an oligopoly engaged in rate collusion.
Of course any company currently benefiting from a monopolistic advantage will fight tooth and nail against the introduction of true competition, and that's what American health insurers are doing now. Whether it comes in the form of a public health plan or increased regulation, true competition represents a real threat to their current way of doing business. But as any good free market capitalist knows, increased competition is rarely a bad thing for the consumer or the economy as a whole. Which is why it's a little bit baffling to me that those on the right are arguing exactly that.
I don't get penalized in my taxes for choosing UPS over the USPS.
I'm not sure what tax penalty you are referring to. Could you explain?
I work for a small business owner in a part time position as a second job. His payroll is > $250k/ year. This is small-fry stuff in that the business grosses about $500k a year. The owner flat out said that if this thing passes as is in the house, the tax burden would cause him to shut his doors. There goes my job. Here's an article that talks about it. Taxing small business on the basis that they're "rich" is doesn't work. Something has to give.
I'm not going to force anything on you, but I'm one who thinks that one of the worst things that happened to this country was Keynes. Oh, and how about this verbiage in the house bill? Explain how eliminating new customers for private insurers isn't going to kill private care? Here's a copy of the house bill if you don't believe that website (which I rarely do).
I'll admit that my personal experience is not a direct tax, but I believe that it drives my point home.
I love this quote from The President-
"I think private insurers should be able to compete. They do it all the time. I mean, if you think about, if you think about it, um, UPS and FedEx are doing just fine. Right? The, uh, no they are. I mean, it's the post office that's always having problems."
I think this illustrate the need to keep it private- the Post office is just hemorrhaging money and yet UPS and Fed Ex are doing just fine.
Also the example of Social Security is interesting because everything I have read is that when we are old enough to use SS it will no longer be available because they are going to be out of money. Another government program that is out of money and probably not able to be solvent long term
Health care while I think is not as bad as represented in the press it can be improved by making it more competitive, limiting law suits against the doctors and hospitals and other ways. I just think that can all be achieved through the private sector
I don't remember where I heard the Postal Service analogy, but I wonder if Obama got it from the same place? Some left-wing rag, no doubt. :)
Dan, I agree with your reasoning, and there are certainly many reasons why the government getting involved in things is not usually a great idea. As I stated at the outset, I am only arguing with one talking point, which is that a public option would drive the private insurers out of business. I think that one argument is demonstrably untrue. Social Security and Medicare haven't driven their private competitors out of business, and neither has the Postal Service. That's all I'm saying. (And I'm certainly not offering any opinions on the current House bill--I don't know much about it.)
There are certainly good arguments for getting rid of SS altogether--and we heard them all during Bush's privatization attempt--but the argument that it was driving private investment companies out of business was not one of them.
Ben, I agree that penalty is bad news. I don't agree with idea of a health insurance mandate in general, and I think it's just another sop to the health insurance industry to try and bring them on board. (Analogies to the auto insurance mandate are somewhat spurious, because you can always opt out by choosing not to own a car.)
As for the verbiage you cited, read the whole section. That clause is merely part of the definition for what plans will be granted "grandfather" status. All it's saying is that plans allowing enrollments that occur after the new rules go into effect will be subject to the new rules, rather than allowed the "grandfather" exceptions of plans that were already in place at the time the new rules are enacted. In no way is it eliminating new customers to private carriers. Seems pretty innocuous to me.
Sorry I don't mean to beat a dead horse but here is a great article in WSJ by the CEO of Whole foods- http://online.wsj.com/article/SB10001424052970204251404574342170072865070.html
Hopefully if you cut and paste the link will work
this pretty much sums up how I feel. I really enjoyed the part where he talks about his employees who work in England and Canada and how they want there health insurance dollars going to them for them to control and not for the government to control
Post a Comment