Letter to the Editor

[cos]

Last night, I submitted this as a letter to the editor to USA Today:

For decades, private for-profit insurance companies have been spreading fear about "government run health insurance". Despite the fact that people on Medicare - run by the government - are more satisfied with their insurance than people on private insurance, the private insurance companies have been telling us that national health care wouldn't work, because the government can't run a good insurance system, and we're all better off with private insurance. Obama's plan puts their claims to the test, and it's time to put up or shut up.

Obama proposes a compromise between a national single payer system, and the private insurance we have now: he wants to put a public health insurance option in the same market as private companies, to let people choose and see what works better.

Insurance companies' complaints about "unfair competition" are a smokescreen. They want to mislead us into a conversation about how to be fair to insurance companies, while they continue being unfair to the American people.

What the for-profit insurance companies are really saying is that they fear the government can run a better health insurance - that satisfies people more, and leaves us healthier, at a lower cost. They may be right. Congress owes it to us to create a public option so we can try it and find out. Stop worrying about the health of the insurance companies, and care for the health of the American people for a change.

Comments

[gwillen.livejournal.com]

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.)