Wednesday, August 19, 2009

Public Option vs. Private Profits

The public option is one facet of the health care reform proposals being considered by Houses of Congress. It has been supported by President Obama. It is not the same as a
single payer plan which both Canada and Great Britain have. The public option, then, would be an option (read "choice") and not a state run medical system like those in Canada and the United Kingdom. Some critics describe the British and Canadian systems as "socialized medicine." Whatever, the public option is not a single payer, state-run or socialized health care system.

Other facets of the health care reform proposals our Congress is considering are regulations which prevent private insurors from refusing to insure (at reasonable costs) persons with pre-existing conditions and from discontinuing coverage of persons who get sick. Another reform being considered would prevent persons from losing insurance when they lose their jobs. According to her district director, my representative in the House, Marsha Blackburn, a Republican, is in favor of those reforms.

The public option, then, is just one aspect of health insurance reform. But I believe it is a most important one. Marsha Blackburn and other Republicans are against it.

The public option medical insurance would be available to people at lower premiums than private insurance plans because it would have the bargaining power of a large pool of participants and would be non-profit.

Pro-business Republicans fear that private insurors would be unable to compete with the public option because the public option plan would not be subject to Wall Street demands for huge profits while the private insurors would. Obama says after start-up expenses the public plan would be self-sustaining but nonprofit.

You know Wall Street, right? That's where "greed is good," so good that it rewards short-term profits with huge bonuses even though the practices it rewards result in long term disaster for the company (AIG, for example), its shareholders and possibly (as in the recent past) the near collapse of the entire world's financial system (i.e. finance capitalism) and the resulting crash (steep decline) of world economies.

Do we even know how many of our health care dollars go for profit? I've heard no numbers although some may be forthcoming. See http://d-day.blogspot.com/2009/08/waxman-show-me-money.html

But aside from profit, we do know that 20 % of our health care dollar goes to the administrative costs involved in filing and processing of insurance claims. This includes the salaries of insurance company CEO's ($20 million, for example). It also includes the huge salaries to underwriters. The purpose of an underwriter's job is to find ways to decrease the amount of premium money that goes to cover the premium payer's health care. The underwriter's job is to ensure greater profits for stockholders.

My question is why Republicans are so concerned about keeping insurance companies in business when their "business models" are designed to place stockholder profits above providing health care to their premium payers?