cos | Letter to the Editor

nicely said.

While I agree that I don't care what's fair to the insurance companies, I think you've missed the point about what they mean by fair.

The funding models for public insurance are very different because, like all our progressive taxes (where progressive means the shape of the tax curve, not the name of a political movement), public health care is redistributive. That is to say that the wealthy pay more for it than the poor do but everyone has equal access. Since an insurance company can't manage its funds that way or even manage its risk-pool that way, it isn't fair.

But I think THAT'S the smoke-screen. It's a GOOD thing that it isn't fair, not being fair is how we get better coverage.

Nope. You're being far too reasonable. The point you're making isn't one that I've seen take much of a role in public debate on this issue.

What I have seen as a talking point, over and over and over, is that creating a public option would be unfair competition for the private insurance companies, because the public option would have competitive advantages over them, with the power of government, and thus the poor little insurance companies might fail despite being as good as they can be.

I've seen this question raised at some of those town hall meetings, I've seen it in clips from traditional TV news, I've seen it raised repeatedly by Republican members of Congress... it's so pervasive that when I got into a conversation about this with a random stranger in Pittsburgh who saw that I was into politics and I asked him what he thought of Obama's health care reform, he didn't know much about it but even he raised this point: "I've heard that ..." It's kind of crazy, but there it is - this is what people are talking about. This is what Republicans and Fox are pushing: That a public option would be unfair competition for the private companies.

Edit: On the redistributive nature of government-run health insurance - which is totally a tangent from the point of my letter - I want to point out that it's more of a redistribution from the healthy to the injured and sick, than it is from the wealthy to the poor. In other words, it's about spreading the risk more evenly, more than about spreading the income more evenly.

Edited 2009-09-10 16:07 (UTC)

This is actually a pernicious falsehood, and since you don't seem to oppose the public option, you should probably not be spreading it. The public option is NOT redistributive. At least as of the version of the bill I read, it was clearly spelled out that it would be funded ONLY by premiums, and in no way by taxes or subsidies.

There _is_ a provision in the bill for people under 3x the poverty line to get subsidized care, but this is effectively a voucher program -- it applies whether they get public or private insurance.

For the most part, the public option is no more redistributive than any private plan. Both redistribute money from those who happen not to make claims, to those who happen to make claims -- this is the purpose of insurance.

There is one sense in which the bill could be said to be redistributive; it requires everyone to have insurance, even if they are healthy, and in that sense it _does_ redistribute wealth from the healthy to the sick. But that provision is _independent_ of the public option. It applies even if the public option does not pass.

Very good point! I did address the fact that I think the health insurance reform overall would redistribute from the health to the sick/injured, more than from the wealthy to the poor, but I failed to note that that aspect of it is independent of the public option.

Since my letter here is specifically in defense of a public option, that's an important thing to clarify.

I would like to add here that private insurance companies do their damnedness to keep from paying out to those who make claims, because although the purpose of insurance is to pay out monies from those who do not make claims to those who do, the purpose of private insurance companies is TO MAKE MONEY.
In this way one would hope a public insurance option would be MORE redistributive of monies from those who do not make claims to those who do.

Yeahwell...insurance companies have gradually been redefining the meaning of "insurance" from being a business in which they took some risks (as in any industry), made some profit if they were smart and lost money if they were stupid or very unlucky, to one in which they are insulated from the downside through any means necessary, including outright breach of contract (ref. the ex post facto redefinition of homeowners' insurance terms following Hurricane Katrina, or any number of health insurance claim denials), and get to reap all the profits of the upside. Unless and until that trend is shot in the head, the only thing that private insurance companies in any solution is what any parasite contributes to its host.

Oh, THAT'S what the requirement to buy insurance is for! Suddenly the things I've been reading make much more sense.

I hypothesize that there is no reason to create a government plan that's the same as private plans, so the interesting part of the health care debate is in how the government plan is different than a private plan.

So far, I've seen two proposals for how it can be different: The one Obama promised us in the campaign that convinced me to vote for him even after he lost my buy-in on Iraq was the redistributive plan I talked about before where the thing that's different is that the costs are offset by wealthier people playing more.

The other way in which it could be different, the way it sounds like congress is thinking of going, is that the government could mandate an unnatural risk-pool with healthy people paying to offset the cost of providing care to unhealthy people.

Both of those approaches involve powers not available to private industry which means both of them constitute, "not fair." The conservatives are right about this.

I've noticed a common theme when people of different political backgrounds talk about things: each side thinks the other side is stupid and/or not listening. Maybe the conservatives are frustrated with us because they keep telling us how unfair this thing is and we don't seem to be absorbing that fact. I think the more productive approach is to concede that point because it's fairly sound; the government really does have more options than private corporations and it can make a thing they can't. It's not fair. Then we can talk about what it costs us to do a thing that isn't fair vs. what it gets us to have public health insurance and the debate can move forward again.

I hypothesize that there is no reason to create a government plan that's the same as private plans, so the interesting part of the health care debate is in how the government plan is different than a private plan.

Maybe the conservatives are frustrated with us because they keep telling us how unfair this thing is and we don't seem to be absorbing that fact. I think the more productive approach is to concede that point because it's fairly sound; the government really does have more options than private corporations and it can make a thing they can't.

I don't think you can have both "the government plan is pointless because not different" and "the government has more options". As I see it, these are both wrong. The government should _not_ have more options -- the point of the setup as presented is to put the government and private plans on equal footing. I don't see where more options come from.

It doesn't follow, for example, that the government can mandate a wacky risk-pool in its plan alone (not to make any statement on whether it would be good to mandate it for all plans); if it does that, healthy people will flee to other plans, in the same way the good drivers flee to car insurance policies with more restrictive requirements, which are thus cheaper.

One advantage I see to having a government plan is based on the following hypothesis: A health insurance organization whose goal is to make a profit, will ultimately be less efficient -- _as judged by the market_ -- at providing health insurance, when compared to an organization whose only goal is to provide health insurance. If this hypothesis is true, then the government plan will outcompete private plans on an equal footing, and the result will be a societal benefit with no economic downside. (Remember that, historically, the point of chartering corporations was not because profit is a good, even if some people seem to see it that way today; it was because offering profit was an effective incentive to get people to join together to do things ultimately benefiting the public good. If we can get the benefit without the cost, we should absolutely take it.)

Another point in favor of the public option is the following: The health insurance market is actually many markets for slightly different products. It's in the public interest to ensure that there are products to serve all segments of society, even though some of those products are less profitable than others. The public option is one way of ensuring that the less-profitable markets are still served. (C.f. the problem of rural telecommunications, which was largely solved by government compelling telecoms to provide service to less-profitable areas -- because this was seen as a public good -- in exchange for the effective monopolies they had over the more profitable urban areas.)

(EDIT: I failed at italics. Trying again.)

Hmm, I think you may still be confusing some things?

I addressed the mandate portion of this in some long comments on an earlier post. First, to make it very clear, the mandate (everyone must get insurance) is an integral part of the reform, and completely orthogonal to the public plan. Regardless of what happens with a public plan, there will be a mandate.

The reason for the mandate is this: We're going to require insurance companies to cover everyone, accept everyone, and not disqualify "pre-existing conditions". If we don't mandate insurance, that'd leave the option open for people to not pay when they are healthy, and then sign up for insurance once they discover some condition or injury that's going to need ongoing care. We're much better off spreading the risk fairly, the way we do with taxpayer-funded programs. You can't opt out of taxes for a particular service until you feel like you need it.

Now, you say Obama promised that the public option would be different from private insurance because costs for poor people would be offset by wealthier people paying more. That's false. Another integral part of this reform is subsidies for low income people to buy insurance, and that is going to be subsidized by higher taxes on wealthy people, but that is also completely orthogonal to the public plan, and it was always going to be - we're going to have those subsidies, and corresponding taxes, regardless of whether there's a public option in the mix or not. Obama never said differently.

The other way you're talking about is, as I said above, also not a feature of the public option. Congress is going to mandate that all insurance companies accept everyone, and cover pre-existing conditions, and that everyone buy insurance. That'll be part of the legislation regardless of whether one of the options for insurance is a public plan or not.

A public plan will be, effectively, a single-payer insurance, but only for those companies and people who want it. If everyone flocks to it instantly (which is not going to happen) then we'll effectively have national single payer - but Congress won't have chosen it, the people will have voted with their feet/wallets. Obviously a big change like that won't happen suddenly. However, if the government can indeed run a better, more efficient, more transparent, less frustrating health insurance than the private companies do now, then people and companies *will* steadily switch over to it, which will force the private companies to improve their service. Either they'll improve to a point where they're as good as the government, and thus don't lose customers, or they'll find new business models (such as adding extra value), or they'll wither away. No matter which of these happens, the result will be better insurance for all of us.

That's why we deserve to get a public option, and that is exactly the point of my letter.

The reason for the mandate is this: We're going to require insurance companies to cover everyone, accept everyone, and not disqualify "pre-existing conditions". If we don't mandate insurance, that'd leave the option open for people to not pay when they are healthy, and then sign up for insurance once they discover some condition or injury that's going to need ongoing care. We're much better off spreading the risk fairly, the way we do with taxpayer-funded programs. You can't opt out of taxes for a particular service until you feel like you need it.

Sounds good on paper, but (as we've discussed before) this has been significantly botched in the case of Massachusetts, which appears to be the model for this mandate. There are a lot of reasons, but I'll confine myself to three:

Failure to define "affordability. The Massachusetts mandate failed to define "affordability" in any reasonable and meaningful way, with the result that some individuals are forced to come up with a significant chunk of change every month in order to comply with the mandate (or get penalized). You simply cannot drop a requirement on people to come up with $600 or more out of pocket every month -- the only effect will be to drive them into poverty. The answer that $600 is not typical is true but irrelevant and, frankly, callous: it's a lot more than one or two people (take a look at what a healthy 55-year-old is assessed), and even if it were a tiny minority, there is no provision for them.
Insufficient flexibility in determining income levels. The Massachusetts plan provides subsidies for people making up to 3x the (laughably low) federal poverty level: if your income level is at or below the poverty level, your premium is 100% subsidized; if it's above that, you're subsidized on a sliding scale up to the point where you're making 3x the federal poverty level, at which point you pay 100% of the premium (whatever that is, see bullet point above). 3x the federal poverty level, by the way, is below $30,000 a year, not exactly living large...but I digress. So how much does a farmer make -- or a logger, or a seasonal or temporary worker? Well, if you're a bureaucrat, you assume that they make whatever they showed on last year's taxes. If you're neither a bureaucrat or a moron, you know that what someone in one of these jobs made last year has fuck-all to do with what they'll make this year. It has nothing to do with what kind of money coming in now, and thus, what you can afford to pay now for a monthly premium. Again, these people were callously disregarded when the system was created. For people who claim that they want to move away from reliance on employer-provided health insurance, the proponents of the Massachusetts plan are blind as bats when it comes to looking outside those narrow lines now.
Overloading the system. With many more people suddenly insured, demand for health care services went way up. As a result, if you try to schedule a doctor's appointment in Boston, your average wait time will be 50 days. Yes, that's right -- Five. Zero. And that's Boston -- elsewhere in the state, particularly western Mass, it's worse. One physician in Williamstown reports that his patients typically wait 65 to 85 days for a routine appointment, and that colleagues of his have four month waits. What good is health insurance that you can't use? We all got told that part of the reason for this mandate was to prevent people from using emergency rooms for things that can be handled at a doctor's office, but if you've got a problem that won't wait four months, where will you end up? In the ER, that's where. Fail.

I've seen too much hand-waving and ignoring of these issues in Massachusetts. It is simply unconscionable. I want to see these issues addressed before I get behind any national plan.

All true, but not necessarily relevant (the Massachusetts public option is funded by a regressive fee structure, and a federal option may also be), and not the reason the insurers fear the public option.

Health insurers exist for the same reason all other private companies exist: to maximize shareholder value within the parameters of their niche. A public option would change those parameters and lower shareholder value.

Which non-shareholders have no reason to give a damn about.

Right. Except that my mother (New Jersey Republican) made a good point. The context was that she felt she was going to be forced into using the government-provided health care option. I mentioned that she could still use her employer's insurance, and she said,

"But what if my employer says they're dropping the private health insurance and everyone will get a raise equivalent to (after taxes) the full yearly cost of the government's health insurance premiums?"

To which the answer is "well, if the health insurance companies want to stay in business, they'll have to be more competitive." Otherwise companies *will* stop spending lots more money for private health insurance, and those insurance companies *will* go out of business. So, yeah, health insurers give a damn.

That's also why it's completely fair for the government to offer an option, but only if it's paid for by premium monies -- because otherwise the government health insurance is subsidized (by the government through taxes) which private health carriers don't have the benefit of.

I don't think that's actually a good point.

Several times in my employed life, I've been forced to switch health care plans by my employer. A few times it was due to mergers, and a couple of times it wasn't - it just so happened that for whatever financial reasons of their own, my employer at the time decided to eliminate one of the plans they subscribed to, or switch to a new provider. That's the current employer-provided health care system: Which plan you get is not under your control, it's under your employer's control, and they can make you change at their whim. Or, drop coverage (though that's less common, because employers who provide coverage want to keep doing so if they can afford to).

In principle, I don't see why it matters that one of the available plans is the new public option, while the others are the various existing plans employers already have available to them. It's no different than if some new private plan were to start up and become available.

That's also why it's completely fair for the government to offer an option, but only if it's paid for by premium monies - why the caveat? The public option Obama wants would, indeed, only be paid for by premiums, but I see no reason why it would be bad to have it paid for by taxes too, if the result were better health care for everyone.

... because otherwise the government health insurance is subsidized (by the government through taxes) which private health carriers don't have the benefit of. ... and I see no problem with that at all. That, again, is worrying about the health of insurance companies rather than the health of people. From our point of view, who cares what the insurance companies have the benefit of? We only care that good insurance is available for us, and that it doesn't cost too much. Are you saying that it is somehow inherently true that giving a public insurance plan an advantage over for-profit plans makes good health insurance for people less available? I don't get that.

see no reason why it would be bad to have it paid for by taxes too, if the result were better health care for everyone.

I agree with this statement. The point of my comment was to try to see things from the point of view of the people who are saying "it's unfair", and try to understand why they're saying that (beyond the motivation of setting a smokescreen).

I also agree that it's a smokescreen.

I'm not sure it's totally a smokescreen. Yes, many of the claims are untrue. But insurance companies are public companies, meaning that they have to yield a decent rate of return on capital, and some of that capital comes from the liquidity market with a cost. The government will have both a lower cost of capital, and a lower required rate of return, meaning there is some unevenness of the playing field. (On the other hand, the government is also hobbled by several things which will level that playing field again, but we're not allowed to talk about those ;)

My biggest hope (and feel free to talk to docorion for a long dissertation on the topic) is that a government plan could change the game by changing the compensation structure for healthcare providers. Not currently likely, but a government plan now would make it easier to make those changes in a few years....

You state the issue succintly and I agree with your statement, except for the first sentence: What you're describing is exactly the smokescreen I'm talking about. Of course it might be "unfair competition" to private insurance companies, and if they can't compete with it, they might fail. Who the fuck cares?

Let them all fail miserably if they can't stand up to this "unfair competition" for good, reasonable, structural reasons. All that would mean is that private health insurance was never a good idea to begin with. Or, maybe they'll get creative and find ways to survive. Some of them might even thrive with new business models, perhaps providing extra services for those who can afford it, or perhaps doing the same thing the public option does even better than it does. That'd be great too.

It's not that the claims are "untrue" - I very much hope the claims are true. What I fear is that they'll manage to hobble the public option so that it doesn't have structural advantages over for-profit insurance. I expect it to take years of work to make that not happen. But assuming all their claims are true, and the public option would indeed have all the advantages over private insurance that the insurance companies and Republicans claim it would: Great! That's exactly the point!

That's what I mean when I say we're being misled into having a discussion about how to be fair to insurance companies. It's as if the commercial success of private for-profit insurance companies were the goal here, rather than merely a rather flawed means to an end that we might choose to replace if it doesn't turn out to work well enough.

Edit: I also want to add that, economically speaking, if it turns out that private insurance companies cannot compete with a decent, strong public insurance, then that will clearly make the case that private health insurance companies represent a misdirection of economic activity away from more useful purposes. That is, it would mean that if everyone currently making a profit at providing health insurance were to instead redirect their efforts to other endeavors, they'd create more economic value. Or, in other words yet again, it would mean that we're currently wasting money paying people to waste their time, effort, and talents on something that isn't contributing to our happiness and well being nearly as much as whatever else those people would otherwise be doing with their time, effort, and talents if we didn't require private health insurance companies (and thus require our economy to use up a lot of people's time, effort, and talents to provide us with such companies).

Edited 2009-09-10 16:04 (UTC)

I think people being able to take care of their heath is more important than health care companies making money.

It's not fair that I was born with eyes that need corrective lenses and my uncle has 20/16 vision. But it's how I was made, and thus I need to pay for glasses/contacts.

My husband has worked in insurance. He was working for a medical supply company. 1/3rd of the denied claims were due to missing info, 1/3rd for typos, and 1/3rd for no apparent reason, just resubmit and they accepted it. With that sort of statistics, you get the feeling they deny a certain number of claims for no reason, with the hope that you won't appeal and just pay. I have little faith in health insurance companies.

With that sort of statistics, you get the feeling they deny a certain number of claims for no reason, with the hope that you won't appeal and just pay. I have little faith in health insurance companies.

Actually I did once meet someone who had worked at a health insurance company and said that they told employees to just skip every fourth claim and deny it without looking at it, exactly as you describe: in the hopes that it just wouldn't matter enough to some of those people, and they wouldn't appeal.

they told employees to just skip every fourth claim and deny it without looking at it . . . in the hopes that it just wouldn't matter enough to some of those people, and they wouldn't appeal.

Scary. Really, really scary.

The private health insurance "ecosystem" is one of the best examples of where unregulated capitalism goes against the public good.

That's a buzzword compliant restating and expansion of what fenicedautun said about them being public companies - they are responsible to their shareholders, not their customers. That is generally considered appropriate in the context of capitalism, but the other important part of capitalism - a free market for competition - is less evident.

Except that the government-provided health care insurance option isn't regulating anything. It's just throwing another hat into the ring.

(there are provisions in the health care reform plan that *are* regulating things, but those are unrelated to the health insurance option itself)

Very nice.

Lessee.

Yes and no to Medicare, but, I think that's a talking point for later. I just view it different because I have a couple ~70 year old parents, who have 3 supp. policies atop Medicare. I just think it's a boarder line debate and I really don't know that I have an opinion I feel is defendable.

My problem with the current PUSH for a government run health care system: the PUSH part. If the previous administration taught anyone anything, wouldn't that be that not everything is a OMG EMERGENCY. This seems to be going fast. Too fast, the reps don't even seem to have a grasp of the current draft bill. Canada, has a pop of about ~30Mil, UK about that, Germany, around there. The US is a factor of magnitude larger, and realistically both the UK and CA are much more civilized when talking politically then we are. Maybe sending some reps from say the AMA to go have a conversation with the NHS about what works and what doesn't. It just seems really rushed, and by really rushed I mean more rushed then that.

From the folks I've talked to around here who aren't waiving pom poms and cheering for this proposal that seems to be the major sticking point. More of a WHOA not a NO. I just think that popular media doesn't focus on those folks because they're not as entertaining as the 'Der Obama is gunna kill mai granny!' people.

Anyhoo if The President wants this to be his legacy, I think that's great. I just don't think that our government has had a great track record over quick action over the past 9 years and maybe a bit more planning and thought are required.

Personally aside from the speed at which it's being pushed, my biggest problem with it is certain religious folks being exempt from the tax, the coverage, and the penalty.

I think you're responding to a strawman, because your comments only make sense to me if what we were considering was replacing private insurance with public insurance, and we're not. Single payer only has about 80-something votes in the House. Obama's plan is tailor-made for the "WHOA, not NO" crowd. A public option can be adopted at whatever rate people are comfortable with, and any employers or individuals who want to stick with private insurance can and will. That also means the size of the US isn't an issue either, because we won't get the whole population signing up for it all at once. It'll grow as fast as people want it to grow, as they vote with their feet/wallets. And if it doesn't turn out to be what people want, then it won't grow.

This plan, which started out more or less as John Edwards' proposals, has been floating around in public debate for several years now. The specific bills have been hashed out in Congress for almost half a year, and aren't likely to be passed for a few more months. The issue of reforming health care has been a pressing problem for decades, and extensively debated. I can't fathom what value there might be in slowing it all down even further, except as a subset of "let's just never do it, let's only talk about it forever".

Nicely put!

So I've read all these comments and I want to use them to underscore my own point. Insurance companies complain about "unfair competition" from a public health plan. I've yet to see anything on this page, either in Cos's origional post or in any of the comments about why that complaint is wrong, you all seem to agree that the public option isn't fair.

Trouble is, none of you are saying that explicitly. You're all silently moving on to the next stage of the argument about how it's OK that it isn't fair. There's a LOT of power in the words, "you're right about that." It could even pull the debate out of the quagmire a little bit. Lets not squander it.

My point is that, right or wrong, that debate is a pointless distraction. Fundamentally, there's no reason for us (the general public, the Congress, etc.) to care whether having a public option would be "fair" to insurance companies. What we care about is whether it's fair to the people in general. Insurance companies and Republicans are trying to misdirect us into debating its purported unfairness to insurance companies, and that's not the point. Sure they care, but the rest of us have no reason to care. It doesn't matter if it's okay that it's fair, or not okay, or whatever. What matters is to get off that ridiculous subject altogether, and talk about what matters, and to do that, I want to clearly point out how they're misdirecting us.

I've done this in person when people have honestly asked, out of genuine concern, whether it's fair to insurance companies to ask them to compete with the government. I've asked, essentially, "why do you care?" and they've thought about it and realized that I'm right, that question doesn't matter so why waste time on it?

Here on my own livejournal I don't really mind arguing that it's okay that it's unfair, but to a broader audience I'd rather focus on the main point: that we're being misdirected into debating the wrong question.

First, in response to your earlier comment to me, I was going to point out that the "unfairness" is not a smokescreen to the question the insurance companies are trying to ask, but you're answering a different question (which you've just pointed out).

Second, I think it does matter that there is private insurance, and the reason is for competition. Here, I'll point to the British model, where there is an automatic public option but something like one third of the population also have private insurance (including one set of my grandparents, but not the other). Private insurance should continue to exist because I don't think the public option should be funding all the medical options available (easiest example is types of assisted living, big gradients without necessarily referring to actual health outcomes). Plus, monopoly service stifles innovation (desperately needed in healthcare - wouldn't it be interesting if a private insurer worked out how to cost less than a public option?) and can promote sloppy performance.

I was going to point out that the "unfairness" is not a smokescreen to the question the insurance companies are trying to ask, but you're answering a different question (which you've just pointed out).

Huh, that comment confuses me. My point all along was that the very question the insurance companies would have us debate is the smokescreen: it obscures the real question we should be debating, which is whether having a public option would make health insurance for Americans better, with a question of their own, which is whether the competition would be "fair". Ultimately, we the people don't care about that latter question, we care about the former: will the overall result of this be better or worse for us (not "will it be better or worse for insurance companies")?

Second, I think it does matter that there is private insurance, and the reason is for competition. Here, I'll point to the British model [...]

Nobody suggests that any plan that actually eliminates all private insurance could possible get anywhere close to passing the Congress, so that's a strawman. Private insurance would only disappear entirely if it could not provide anything whatsoever that anyone finds value in. It might get much smaller than it is now, or might not, depending on how good a job it does, but complete disappearance seems far-fetched (and if it does happen, it would happen only because it turns out that we get no value out of having private insurance).

As you point out, even if we had a public health system as comprehensive as the NHS (which neither Obama nor Congress seems to be contemplating), there would *still* be some niches for private insurance as long as we didn't ban them. And you certainly can't pretend that there's "fair" competition between the NHS and the private insurance companies in the UK. It's clearly dominant, with huge structural advantages, and no pretense of a level playing field. But so what? A level playing field between private and public insurance is not a legitimate public policy goal, better more effective health of the people is.

A level playing field between private and public insurance is not a legitimate public policy goal, better more effective health of the people is.

Just to try to fathom, for a moment, the minds of those who say they want a level playing field: As I see it, "efficient allocation of resources" is a legitimate public policy goal. If one finds a way to structurally favor the public plan, _despite_ the fact that it allocates resources inefficiently, then there would be legitimate complaints against that. For example, if the public plan was tax-subsidized, I would see "uneven playing field" as the following legitimate complaint: the public plan could be _worse_, by all available measures, than any private plan, and yet might still outcompete them due if it had heavy subsidies. This would be a negative outcome for everyone, and I think this is the outcome envisioned by those who complain about the evenness of playing fields.

So to me, the right answer to "uneven playing field" is "show me where resources would be allocated inefficiently". An uneven playing field which can't pass that test is potentially bad; one which can is potentially good.

Mind you, I _also_ suspect that most of the people who complain about level playing fields are under the misimpression that the public option WOULD BE subsidized. So if you don't directly attack that point, you may not get through to many.

(BTW, I am arguing here entirely under the hypothetical view that subsidized public healthcare would be bad. This is not because I hold that belief; I just want to point out what people who DO hold that belief are probably intending to argue about.)

*nod* I see what you're saying - it is part of what some people who are formulating these messages are thinking. It's not what they're communicating to the general public, though, and there's where my letter is aimed.

Purist Libertarians tend to believe that just about anything we currently subsidize by taxes would be better done privately, but only a very small proportion of the public agree with that view, so it's not a winning argument.

I'm on the other side: I'd be much happier if we had a ongoing-tax-funded public option. That's not going to happen this time around. I suspect my position has a lot more support than the Libertarian position, though I'm not sure whether it's a majority (it's really hard to measure to that level of precision, it's probably in the 35%-65% )

I have read the rest of this thread and I didn't see a clear answer to this.

The answer is that the complaint is wrong, because a government option wouldn't provide "unfair competition." Like the commercial health insurance companies, the government's health insurance program would be self-funded (as in, funded by premiums). So the question is, what exactly is unfair about the government adding to the competition?

The only thing I can think of that's unfair is "another provider will be charging less than we do, stealing all our business." But that's only a valid argument if the government health insurance wasn't 100% funded by premiums -- ie, if tax money was going to the insurance payouts. Companies self-fund their insurance using premium monies, so it would be unfair if the government funded its insurance using monies that regular companies can't get (like tax revenue).

But I wasn't satisfied with that, so I did some research: http://www.heritage.org/Research/healthcare/bg2311.cfm makes the argument that government-run health insurance is unfair because:

1) The government will have the lion's share of the market . . .
a) . . . due to insuring people who aren't currently insured. (solution for commercial entities: make your non-group (ie, not offered through an employer) insurance more affordable and you, too, can insure people who aren't currently insured)
b) . . . due to being cheaper than current options. (see a) for the solution).
c) . . . and that would lead to the OMG DEMISE of private insurance (they could have made this argument better by saying that the government would have a monopoly -- which *is* unfair (historically, among service providers). Thus, even though the government is "fair competition", it's quite logical to conclude that they're *so* much better that they drive their competition away (again, fairly and legally), that they then become a monopoly (which isn't fair.) )

2) The government isn't a corporation and thus does not need to follow corporate laws. Thus, they get out of things like paying taxes,
The article says 'In reality, the "competition" would be rigged, with the government plan enjoying a number of advantages.' but it doesn't say what those advantages are.

If that's really "unfair competition", how come Wal-Mart is still allowed to provide goods at super-cheap prices?

3) The government may or may not need to follow state licensing guidelines for insurance companies. (My first thought was "duh, just look to see if Medicare and Medicaid need to follow state licensing guidelines." But it's not that easy, as each state handles Medicare and Medicaid differently.) Again, this argument could have been made much better if it was changed from "it's unfair because they might not have to follow state licensing guidelines" to "state licensing guidelines exist for your protection -- otherwise insurance companies would never pay out *any* claims. If the government health insurance program doesn't have to follow those same guidelines, those insured by it are at risk."

And then of course, if the government has a monopoly AND doesn't have to follow licensing, the state of health care in the US would get tons worse.

4) Similar to #3, private insurance can be sued with torts, which the government can't. It's unclear whether the government health care insurance program would be able to be sued with torts or not.

(continued)

5) A new regulation in the plan is to have a government agency review *private* health insurance plans. If the government agency doesn't think that the health insurance plan is good, it can deny the commercial entity the right to offer that health insurance plan. Again, it's unclear whether or not the government health insurance would have to be reviewed by the same agency, but even if it is, it might be fast-tracked with things overlooked because it's the government.

6) The government has resources that insurance companies don't. We could get messages about the federal insurance program sent to us with our census forms, tax information, voter information, etc. In essence, the government has the largest list of possible leads to market health insurance to, including lots of private information (like phone numbers, including those on the "do not call" list, e-mail addresses, and mailing addresses). And they have that information already, even before a plan is formed. (I agree that this is unfair, though I doubt that the government will spam us).

7) Medicare currently is allowed to reimburse less money to the doctors and hospitals than any private insurer has been able to negotiate. This would be extended to the government health insurance plan. It is arguable as to whether that is unfair or not; but it helps catapult the government plan towards being a monopoly. And in any case, if the government decides to "negotiate" even lower, there could be a perception that the doctor/hospital has to accept that, because the government is way more powerful than them. (akin to if your landlord raises your rent, or your mortgage company raises your fees or interest rate -- you accept it until a certain pain point, because they are providing you a service and have power over you. And it's hard to deny that the government is perceived as more powerful than any one insurance company....especially if it does end up being a monopoly).

8) Even though the government health plan is self-funded by premiums, it will lose money in the first few years. That money has to come from *somewhere* -- and it will come from the taxpayer (just like if you started your own business, your private bank account covers more losses once the corporate account gets to 0). The government could charge less than the actual cost of a premium *should* be, undercutting everyone, and having the taxpayer pay the difference anyway....basically the government could lie about how much a premium should be, and cover the loss with taxpayer money.

So...after reading this....while there are *some* valid points that a government-run health insurance option is unfair, I believe those are minor points. However, *if* the government manages, in a fair manner, to drive private insurance companies out of business (which is the argument that most people are making in this post + comments as to *why* the insurance companies are saying it's unfair - because a cheaper option means less profits for them), *then* the government will be a monopoly, and *then* there is definite potential for unfairness.

I have read the rest of this thread and I didn't see a clear answer to this.

The answer is that the complaint is wrong, because a government option wouldn't provide "unfair competition." Like the commercial health insurance companies, the government's health insurance program would be self-funded (as in, funded by premiums).

I disagree, not because you're wrong (I think you're right), but because this is an illustration of the very wrongness I'm protesting with my letter. You're actually trying to answer their question. I think that even engaging that question is falling for the trap, the smokescreen that misleads us away from the questions we should care about.

If we start arguing that no, it's not actually unfair competition, they can come back niggling at the details and explaining why they think it would be unfair competition, and there's no real way to prove that wrong. The point here isn't who can convince who, the point is that they're trying to bog us down into a debate about whether this would or would not be fair competition between the public option and the insurance companies.

That is fundamentally a wrong debate to engage in. It stems from their arrogant sense of entitlement, that somehow the health of private for-profit insurance companies is important, and that it should be our goal to avoid unfairly competing with them. As long as we continue having that debate, we're on their ground, and thus, we're losing.

It's important to stop trying to answer that question. That's my point. It's the wrong question.
IT FUNDAMENTALLY DOESN'T MATTER. Even if they're "wrong", saying so is part of falling into their trap.

Well, yes, this is the framing and all.

But I did read the thread -- you explained why you weren't following the "is it fair?" trap. However, I think that the question "is it fair or not?" deserved an answer *after* you'd already explained why it's not a good question at all.

I think it's useful to say "that's not the point! The point is that it's a smokescreen." But it's even more useful, for people who *understand* that it's a smokescreen, to go back and actually answer the question...ie, "not only is it a smokescreen, but the claim that it's unfair is wrong."

Plus, I think that using the facts, those who oppose the gov't health care plan could have made a convincing *logical* argument about why it *would become* unfair, in addition to making their *emotional* argument.

Ahh, okay. I worry, though, that getting too deply into the details of answering the question, will focus people back on ... the details of the question, and make them forget how fundamentally wrong the whole question is in the first place.

For example, one of the points you brought up was the government's ability to use its size to negotiate lower prices. In the context of "unfair competition" that seems like a possibly good point, but if you step back and look at the real goals of health care reform, you realize that that's actually a great reason *to* have a public plan - if it can do that, who cares if it's "unfair", it's *better*. That's the sort of thing that worrying about the fake "unfair competition" question can obscure. In some cases, the very things we want to accomplish may turn out go hand in hand with competing "unfairly", and where that turns out to be true, those are things we should pursue.

Plus, I think that using the facts, those who oppose the gov't health care plan could have made a convincing *logical* argument about why it *would become* unfair, in addition to making their *emotional* argument.

Perhaps the could've if they'd wanted to more, or tried harder. I don't know. Probably not - in the general public, this is engaged on a level of broader arguments, not details. What I see permeating the public is the idea that the public option might be unfair competition for private insurance companies. I don't see people convinced that they know a bunch of detailed facts that explain why that is or isn't true, I just see people bringing it up as a general concept. Blowing away that smokescreen is my goal here.

You seem more in tune to what's going on activism-wise than most of the people I know. From where I sit, the picture looks kind of scary and very confusing. Are the bad guys winning? I can never tell. Is there more that I can or should do? I'd love to hear about that as well.

Thanks for all you've done so far...

I think the overall picture is more good than bad.

And I think what you're really looking for is my previous LJ post. Go back one.

Saw it. Followed up on it. Just didn't know if anything has changed. I take it that it has not?

Very well said!

Letter to the Editor

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Please keep the info coming.

Re: Please keep the info coming.

Re: Please keep the info coming.

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