The problem faced by private health insurers is simple: How to avoid sick people. The business exists to siphon money off of our health care system, and sick people conflict with that objective.
Even supposed non-profit health insurers are caught up in this system – if they accept rejects from private insurers, they will end up with all the sick people. So they avoid them too.
As always, it is not about evil people. It’s about a corrupt system. People who occupy slots within that system have two choices: Play the game, or do something else for a living.
This should be well understood by this time – it’s Health Insurance 101, but it’s not. The debate is so well managed in this country that the bare naked facts are still obscure to most people.
Down below, I tracked the behavior of several insurance stocks as the debate has raged on in Washington about “reform”. There’s been no great upheaval. Those stocks are a little depressed compared to the market as a whole, but there doesn’t seem to be any investor hiatus. It’s business as usual.
And it’s not hard to know why. Any real threat to the business model vanished months ago. Politics is playing out the fate of a supposed “public option” now on the hill, but it doesn’t threaten the model.
In fact, as Congressional Budget Office Reports, the house version of the public option, supposedly more aggressive than the Senate’s, might reach about six million people, and at higher cost, than private plans. (WSJ gives a rundown here.)
Why so? Because it would operate under the same business model as private insurance, and would therefore attract private insurance rejects – sick people. And as any insurer will tell you, if your plan attracts sick people, you won’t be long in the business.
Which is why we need single payer. Health insurance is a government job, or at least needs to be made entirely non-profit, as in Switzerland and the Netherlands (and Minnesota). It’s not rocket science. It’s merely counterintuitive to people indoctrinated in “free” market ideology.
Interesting – I’ve said from the beginning that Democrats are the problem, and of course, I catch hell for that. But there was a glimmer of hope. The House Progressive Caucus put out a bold statement – it would not support any bill that did not contain a strong public option.
What happened? Politics happened. These House members have been approached behind the scenes and told that their financing will be cut off, their district pet projects threatened -Nancy Pelosi, who appears weak before the cameras (as does Harry Reid), is actually quite a ruthless bitch behind the scenes.
How do I know that? Oh, I don’t know – I guess just from following politics. One must pay close attention to detail and intrigue, as everything that happens in front of the cameras is mere theater.
P.S. Here’s some high comedy – A fellow named “Livingston, I Presume” put up a piece banging on congressional Republicans for accepting Medicare while opposing a public option. Steve W. quickly puts him in is place in the comments, reminding him that Democrats killed reform, and that the Republicans, while interesting, are irrelevant.
Piece of Mindful 