Public Option

Conservatives make the argument, inartfully, that the public option is a Trojan Horse intended to usher in a full, single payer health care model. PBO says it isn't. RSP believes it is utterly inconceivable the public option won't one day, soon at that, be molded into a single payer model by a future Congress irrespective of what PBO says today. Read this by a contributor to Politico (you'll have to scroll down to find "What Leveling the Playing Field Really Means"). He lays out six advantages Congress could legally confer upon a public option.

If you believe Congress won't over time extend those advantages to the public option, you are deluding yourself. Democrats in Congress have an ideological hatred for private insurance and Republicans refuse to argue forcefully in favor of competition. They let themselves get painted with the "pro-insurance company" brush. Genuine free-marketers favor competition, not competitors.

There are legitimate market failures within health insurance government can address but competition isn't one. There could be more competition tomorrow if Democrats wanted, but they don't. They want to demonize insurance companies, which is politically useful for them but doesn't attack the real cost driver: DEMAND!!!!! As I've written before, we are a rich, advanced, aging, lazy society which is the perfect blend for relentless demand for the latest and greatest. The immediate realizable savings from tinkering with HI profits is not a huge amount of money (profits are about 3% post tax for large insurers) but is part of an ideological war. Put pressure on profits while introducing an inevitably subsidized competitor and sooner or later private insurance will collapse.

The pre-existing conditions exclusion and rescission exist not because HI executives are dicks, but because fraud and adverse selection undermine the very concept of insurance (HI executives probably are dicks, but exclusion and rescission are not good evidence). If carriers are committing fraudulent rescission, then prosecute and fine them vigorously. As a country we've lost our collective minds about health insurance. Insurance is intended to cover the random financial catastrophe. It cannot pay everyone's bill for everything, whether the plan is for profit or not-for-profit.

PBO has stated repeatedly he wants to do away with annual or lifetime benefit caps. No insurance scheme can possibly price in unlimited liability. Here's a little tidbit for you: I have a private, family policy from a for-profit carrier with a $5M lifetime benefit. The policies of a non-profit co-op, GroupHealth, (a West Coast insurer and provider) have lifetime benefit caps of $2M.

Guess profit isn't so bad.