Private health insurance can only be profitable under certain circumstances:
1) Insurers must to avoid sick people. They do this by 1) denying coverage to people with preexisting conditions, and 2) by using the workplace as a market. Employers tend to hire mostly healthy people, so pre-selection is done for the insurers before the policies are sold. That’s why private health insurance sold through employers, though too expensive, is an otherwise effective system.
2) By definition, insurers have to avoid people who can’t afford premiums. They either do without coverage, or are dumped on government.
3) Wherever possible, insurers have to avoid paying claims. They have many weapons at their disposal – they write the policies and understand them. Consumers don’t. They have tremendous and unequal bargaining power. It’s very hard to fight a claim denied – first you have to appeal to the very people who denied the claim, and second to the courts.
4) If insurers are forced to offer coverage to everyone (the Dutch model), then all people must be forced to buy coverage. This ensures that the companies will he covering a mix of healthy and sick people, and costs will be kept down.
5) Insurers have to avoid competing with one another. They already do this – all companies follow the Dwayne Andreas maxim that competitors are friends, customers enemies. “Free markets” are kind of a sick joke, an illusion, as markets are cruel and destructive. The whole point of accumulating wealth and bribing government officials is to buy insulation from market forces. We all know this. We just don’t say it. (There are over 1,300 private health insurance companies – if one turns you down for a preexisting condition, all do. You’d think that in a free market, one of those companies would take a chance.)
6) If insurers are forced to cover sick people, and if they have to cover people who can’t afford their policies, they will not be profitable investments, and will have to be subsidized to survive.
Hence the Max Baucus plan: 1) Insurance companies must survive, at all costs; 2) The IRS will force us to buy policies; 3) Competition (a strong “public option”) is not allowed, and 4) subsidy, subsidy, subsidy. Baucus is an private insurance tool, so it should come as no surprise that his plan reflects insurance company needs, and not ours.
The illusion of the free market holds strong in this country, so that we will probably stick with the private insurance model. So we will be faced with mandates and subsidy. I doubt we will save any money. More people will be covered, but insurance companies will still operate as a barrier between the public and the health care system. It’s crazy, it doesn’t work, and is what happens when ideologues of the right rule Washington.
Single-payer works because it is not a “free market” concept – it undermines the illusions and bypasses the profit seekers. It provides care to sick people in one easy step. Every country that has tried it has kept it. Every country that has gone to a public system has kept that system with one exception: Iraq. Paul Bremer forced them into the U.S. model.
That appears to be the only way anyone else will buy our health care system. At the point of a gun.
Piece of Mindful 
Here is a much better primer that actually explains how the system works: http://www.kff.org/insurance/upload/7766.pdf
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Craig – insurers constantly carp about government mandates and their inability to cross state lines to sell policies from states that are not strictly regulated. That’s their solution to eh problme – to under-insure everyone.
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“The illusion of the free market holds strong in this country, so that we will probably stick with the private insurance model. So we will be faced with mandates and subsidy.”
Mandates and subsidy seem to defy the word private, yet we say it anyway. A more proper description seems in order. Corporate?
“Single-payer works because it is not a “free market” concept – it undermines the illusions and bypasses the profit seekers.”
The ultimate irony: “Free-marketeers” can’t stand the thought of competition from individual citizens working together. Democracy. Imagine if UPS or Fed Ex feared competition from the US Postal Service.
Yet more proof that insurance giants are too big to exist.
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Mark, at various times over at that other place, you have given me massive amounts of shit for making some of the very same points you make here, the most telling one being that insurance companies don’t compete with each other. I would sincerely love to know why you do that?
There is one point you are very wrong on, by a contradiction you yourself point out and embrace:
Mark, crazy or not it does work, precisely because the American people mostly wish it to. That’s the core of the illusion; people wish it to work. You can work, very hard as you have, to destroy the illusion and wake the thoughtless. *That* won’t work, because you are attacking a deep wish. You might as well be attacking what it means to be an American … oh wait, that’s exactly what you are doing. You want to raise their taxes! (Trust me, most of the folk who will happily make a distinction between what they get paid and what their employer covers for insurance will never make a distinction between premiums and taxes. It’s the difference between charging me and charging that useless bastard I work for, goddamn his greedy soul!)
Now I fully expect you to completely, yet again, misunderstand me as a supporter of the current illusion. I am not, nor have I ever been. I have tried, kindly, angrily and brutally tried to get across to you the strength of opposition that is faced here. Most people will be easily convinced that single payer isn’t a shift in expenditure, it is a tax. They will easily fall prey to the argument that if they are taxed for health care, their employer will simply gobble the savings (and some will, without a doubt.) These people aren’t stupid, they aren’t morons. They are self interested. Funny, that’s not a crime.
In this country, single payer is a non-starter. The messaging is wrong, and the marketing is arrogant. You are so saddened for the poor saps who have a broken health care system (even though the vast majority don’t find THEIR health care broken.) But you save your true venom for those who point out that people will disagree with you, and you need to find a better way to sell your objective.
I’ve done little more than agree with you about the objective. I think your tactics are wrong headed and counter productive. You decry mandate but have no shame in calling for a mandate. And the best counter argument you seem to have is 3-sided geometry. ~sigh~
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i explained why the private model works under certain circumstances, like yours – you are employed by a large institution, so insurers have crossed the adverse selection barrier. But the model does not work outside of the workplace.
Obama has emphasized again and again that those who like their coverage can keep it – that would be those of you covered in the workplace who don’t pay premiums and have not tested how good your policies really are, nor ever experienced COBRA.
I have emphasized again and again that the private model does not work outside the workplace. Baucus wants to ensure that it does by mandating that we buy coverage from them and subsidizing them. Wew are fighting them on this.
Why is that so hard for you to understand?
And I explained exactly why single payer works. It’s academic, I realize, but good to know.
How do you explain, again then, how all these people who favor single payer oppose single payer?
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Again then, they oppose it because they are not willing to commit to a buy in, or be forced to do so. Single payer as ‘opt in’ isn’t single payer. It is exactly what I’ve called it, a strong public option.
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I don’t think you know what’s even possible with a little leadership. Nor do I think you know the public mind.
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Mark, your personal biases and delusions concerning me are not germane to any point at all.
Regardless, you’re wrong. I do know what’s possible with a little leadership, good and bad. I return to an earlier observation: Your problem isn’t that we don’t have leadership. It’s that we don’t have the leadership you want.
I will agree that I don’t “know” the public mind, with the caveat that you obviously don’t either. I do, however, know how to read polling. I know how to interpret Luntz’s talking points and I’m just as well schooled about propaganda as yourself. Given that information, I’d say you have a problem.
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I do know what’s possible with a little leadership, good and bad. I return to an earlier observation: Your problem isn’t that we don’t have leadership. It’s that we don’t have the leadership you want.
No, you’re wrong. It is not leader-like to start out a negotiation by trashing your strongest selling point. It is not leader-like to go into a battle looking for a compromise. That is, as I have said again and again, bad leadership. DO I want these jackasses in charge? Doesn’t matter – the objective criticism I make is that as leaders, they suck.
I will agree that I don’t “know” the public mind, with the caveat that you obviously don’t either. I do, however, know how to read polling. I know how to interpret Luntz’s talking points and I’m just as well schooled about propaganda as yourself. Given that information, I’d say you have a problem.
Not a damned thing you say that can’t be overcome with leadership. The polls say what they say – that people want single payer. It’s raw untamed energy. It needs to be mobilized and crafted. Can’t do that without … leaders, which I have objectively observed, we don’t have.
Luntz scares you? That is so … Big-D democrat of you, shirking a fight.
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Again with the BS arrogant assumptions. It’s really all you have, Mark.
Can’t name a one, can you? I can. Max Baucus. He’s leading us to health care financial ruin. Rush Limbaugh. He’s leading us back to conservative authoritarianism. Harry Ried. He’s leading us to the masturbatory Mormon fantasy of societal collapse and the sweet embrace of Mitt Romney. Tom Cruise. He’s leading us to a rejection of Zenu’s mind control. Joe LIEberman. He’s leading us into war with Iran, and Egypt creating a Palestinian state (that they won’t do, so I guess we’ll just have to kill them all.) Glenn Beck. He’s leading us to shoot up anything that supports that Nigra in the White House. Sarah Palin. She’ll lead God knows where.
Mark, we have leaders. We have a metric buttload of leaders. They just aren’t leading where you want to go. If you would like to suggest a leader that will go where you want, please feel free. Perhaps, Kucinich or Nader.
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Nader is a man among men. Prophets are never respected in their own time. Historians will write that he did more tangible good for this country than Clinton or Kennedy or Carter or the current resident.
And no, I wasn’t being snarky – you really are scared of the right wing noise machine. Pussy. Here’s what happens – you don’t fight, you compromise, you lose. You fight, you lose. One way has dignity. The other not.
And oh what a surprise you hit me with – that there are people leading us who take us to places I don’t like. Say it ain’t so!!! No – leaders are people with convictions who fight for principles. I was talking about Democrats. There are a few, but not enough to matter.
Look at today – Daschle comes out against a public option. Fine, but tell me: How – how! is it that men like him occupy the leadership spots? Why is it that Kucinich, a fine and honorable and brave man, doesn’t? Do you get manipulated much? Are you taht easy?
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