Democrat US Senate majority leader Harry Reid of Nevada currently is pushing a ‘public option’ plan in the health care bill now before the US Senate. President Obama has favored the public option as well. And repeatedly we are told that this public option – a polite way of saying a government-run health plan - will help to bring down costs by increasing competition with private insurance plans. And that sounds very capitalistic and natural.
Meanwhile the private health insurance industry is being demonized by Democrats who are saying that it is making excess profits. Yet the insurance industry is way, way down on the list of profitability with profit margins of only about 3% whereas some top-tier telecommunications companies are making more than 20% and oil companies make around 10%. So the myth of the rapacious insurance companies is false.
There already is supposed to be competition in the health insurance industry, with hundreds of companies in existence. The only problem is that even with that number of companies there is hardly any competition.
Because there is so much regulation that companies do not compete with each other but rather they coexist in a highly regulated state-by-state environment. If insurance companies were allowed to sell policies the way that, say, car makers sell automobiles, there would be everything from an inexpensive bare-bones plan for only catastrophic costs (with, say, a $50,000 deductible) all the way up to an all-inclusive and very expensive ‘Cadillac plan’ to cover every single ailment and treatment, and currently available to bigwig corporate executives, union bosses and other rich guys.
But state-by-state regulations require that plans sold in, say, Colorado, have to cover this, that and the other thing, often covering hundreds of conditions, pushing up the cost. There is no real choice, and these government mandates increase costs relentlessly. But why should you pay for acupuncture, foot massage or blemish removal if you do not plan or want to use them? That would be like forcing you to take out fire, theft, collision, hurricane and tsunami insurance on your old car when you know that it is not worth the cost, or is not any risk at all.
So if the state pushes up the cost of your insurance through mandates and then offers you a government plan that is backed by the taxpayer, you are more likely to fall off of your private plan and onto the government plan. And so the very existence of this public option would have the tendency to incrementally harm private insurance companies which would be getting attacked from two sides – from excessive mandates and regulation; and from unfair competition from the government.
President Obama and the media continue to tell us that health-care costs will come down with a government plan. But that is bunk. Ultimately anyone who pays taxes will be paying dearly for this whole health-care plan - and much more for the public option if it passes - through higher taxes. Then they have to pay for their own insurance as well, whose cost is rising all the time.
Think of this whole situation like the public schools. You must pay taxes to support public education even if you do not have children or do not use the public schools. And you pay those taxes forever; they never end. This gives the public school bureaucracy an endless revenue stream to spend as they wish, particularly on salaries and benefits for unionized teachers. Public schools are the 'public option of education'.
But liberals argue that private schools are allowed to flourish without interference, just as they say that the private insurance industry will be allowed to sell all the policies it wants under Obama Care.
But that is a feint. Because public school taxes drain away so much wealth that most families cannot afford the extra cost to send their children to private or religious schools. So if you want to spend more money to send you kids to private school, you are free to do so. But you know how it works. It is very costly over and above your taxes.
Then when proposals are made to issue school vouchers using school tax money, or to take other money from public schools budgets to fund charter schools, the public school bureaucracy fights it every way they can. Because it cuts into their revenue stream. And then they see the competition from private schools as exposing their failures. And we all know what the public schools generally end up saying about their mediocre educational offerings - “take it or leave it. Because you are already paying for it.” Because they know you don’t have much choice.
Today increasing numbers of American school students attend charter schools. Yet as education moves in fits and starts toward some privatization and private quality, health insurance is moving in the other direction - possibly into the public option - rapidly and with only the stroke of Obama’s pen.
So once there is a public option in health insurance, the people who run that public system will seek to corner as much wealth as possible and to give nothing to competition, like the public schools. And this is how the private insurance industry will be gutted – slowly, but surely. And soon private insurance would only be for the rich, like private schools.
Finally, we see liberals telling us the same nonsense about energy production as they are saying about health care – that once we build government-subsidized ‘green’ energy systems that the price of energy will come down. But that is false; the price will go sky high, just as it has gone up, up and away in education and will go up with health care. Because windmills absolutely require a government subsidy to survive and are only 40% as efficient as nuclear power. And so we will have to invest 2.5 times as much in windmills as in nuclear, much of it from the taxpayer. This will raise taxes on everyone including the utility industry, draw away vast capital resources from nuclear power, and effectively reduce supply, pushing up prices and ruining our energy production system.
The whole health-care public option is a charade to slowly gut the private insurance industry. It probably will be defeated for now, but it may reappear down the road. Yet we easily can reform the private insurance industry by common-sense cost-containment measures that were used in the 1990s and were very successful. Until liberals started screaming about them, and then they were canceled.
We also need to restrain the Democrat trial lawyers, restrain the Democrat health care unions like SEIU, and restrain the Democrat politicians from over-regulating and mandating the insurance industry. All these private measures together could easily fix health care for good, with no public option and no tax increase.
Yet even without the public option, the Congressional Budget Office says the current health plan will cost almost $900 billion over the next ten years and we know that means many trillions more down the road. But that is unimportant to liberals who want government control and ultimately the public option. And they should just call all it what it is – socialized medicine.
Please visit my website at www.nikitas3.com for more. You can print out for free my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.