Wednesday, June 24, 2009

The problem with that "public option" option

Here's part of a reader's comment I found over on OpEdNews underneath an article entitled "The Simple Answer to America's Health Care Crisis: Medicare for All":

A public option that would "compete" with private insurance would be doomed to fail unless private insurance companies were compelled to accept all applicants regardless of pre-existing conditions. Good luck getting that to happen. Because private insurers would continue to cherry pick only the healthy to insure, the public option would be the only entity insuring those with pre-existing conditions and would require massive subsidies.

The primary reason single payer could take on the 50 million or so people who have no insurance in this country without raising the overall cost of health care in the U.S. is because single payer, like Medicare, has only a 3% overhead compared to 25-35% in private insurance. That extra 22-32% goes to marketing, lobbying, investor return, CEO pay, etc, all items that have ABSOLUTELY NOTHING TO DO WITH PROVIDING HEALTH CARE.

That's why even if private insurance companies were compelled to accept all applicants regardless of pre-existing conditions, the whole system would continue to have these huge cost inefficiencies, because the insured are not a single group, but instead are split into thousands of small groups with no financial leverage.

Why isn't the "cherry-picking" inevitability not being talked about among the mainstream pundits? Why isn't the outrageous level of CEO salary being talked about? Would we even enjoy a sporting event if there were a different set of rules for each side? Of course not! Competition is not the real thing if there's not a reasonably level playing field.
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