Correspondent of the Day: Private Insurers Fear Obama’s Health Plan
Private Insurers Fear Obama's Health PlanEditor, Times-Dispatch: To respond to a question posed by President Barack Obama during his Rose Garden press conference: "If private insurers say that the marketplace provides the best quality health care; if they tell us that they are offering a good deal, then why is it that the government, which they say can't run anything, suddenly [is] going to drive them out of business?"
If the federal health care plan (FHCP) rates are underpriced (as expected since the federal government will want to make the program as attractive to the marketplace as possible), then the federal government will be required to pass along some of the losses in the form of future tax increases, although the vast majority of the losses will be passed through as ongoing deficits (similar to how Medicare losses are currently recognized). Since the FHCP will not be able politically to pass along a sufficient rate increase in subsequent years to be self-supporting (as is required by the insurance companies to remain viable), more participants will continue to choose the FHCP, which will mean future tax increases will be needed to cover the losses and/or the federal deficits will be grossly accelerated (neither of which is an available option for the insurance companies).
The insurance companies in the interim will lose market share, have fewer people with whom to spread the risk and administrative expenses, and have to raise their premiums even more to cover past and expected future losses. It will not take the insurance companies long to realize that they are in a protracted death spiral from which they cannot possibly recover -- so they will decide pretty quickly to get out of the business altogether.
In three to five years, the FHCP will be the only viable plan option.
Gary S. Powers.
Midlothian.
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Reader Reactions
Not very knowledgeable on this subject, I only know my insurance through work is pretty good, costly to me even though my employer pays some of the premium. My insurer paid fairly well from a serious family illness a couple years ago, but it still cost me close to $8,000 out of pocket during the year.
I can’t help but wonder if the high cost of medicine and health care in hospitals, doctor’s offices is related to the higher costs being passed on to those who pay to make up for those who don’t or can’t afford to, or have no insurance.
For those who complain of choosing to keep their private insurance and still pay taxes for the federal health insurance plan, it seems we already pay taxes for things we do not benefit from personally, so how is this different?
i.e taxes for education even though you have no children in public schools, because you choose to send them to private, just as an example.
Another example would be Federal Parks, like Shenandoah National Park that is funded by our taxes, yet you never visit or use it.
I believe this country needs a health care system badly. I don’t have good suggestions about how it should be done but am hoping the experts and the congress and White House can study how well it works for other countrys and learn from that and apply to us.
The Private Insurers should be afraid, They post profits in the billions, yet refuse to insure many Americans, They refuse treatment options that are proven, and drop patients they deem as too expensive.
That Billions of dollars in profits could be paid by their EX- customers into a public option that actually would treat and insure Americans now without options.
For decades they have colluded with each other, with the Pharmaceutical Industry and with for-profit hospitals to pretty much eliminate the concept of “competition”.
When everyone charges the same prices, and there is no variance between providers within a given region, and no new businesses of the same type start-up, or move into that area, it should be a clue that something is amiss.
If the fear is that true competition, in the form of a public option will destroy the insurance companies ability to survive, then one has to take note of prior years and ask how come profits were so high, and service levels so low?
“Will the health care reform deal with illegal aliens burdening the system now?“....good question.
Perhaps someone will detail what current rights are written by private insurers, federal government, private and public facilities, for illegal aliens, beyond life-threantening E.R. responses?
Will the health care reform deal with illegal aliens burdening the system now? There is a large savings there.
Where is it so written in the final proposed Senate health care reform bill?
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