Government Insurance? I Think Not


I watched about 5 hours of the healthcare summit yesterday.  I was talking to my wife, and insurance professional, about the goings on, and she made some interesting comparisons. 

She has been worried about the National Flood Insurance Program, an insurance product sold by the government through private insurers.  This arrangement isn’t a good deal for the insurance providers, as they are paid by the government service fees.  These fees are often less than $100 per year, and the private companies are required to service these policies.  The reason she’s worried is that the funding for this program hasn’t been extended yet, and is due to expire on March 1.  That’s Monday.  The funding is attached to the funding for extending unemployment benefits, and if that doesn’t pass, no NFIP.  This product is required by the governement if you live in an area prone to flooding.  So, the government tells you that you must purchase this product and the premiums, almost all of it, go to them.  And here’s the kicker:  if you have a claim, the government will pay your claim and allow to rebuild your submerged house in the same place, so that when a flood happens again (remember, these are areas prone to floods), your house will be destroyed and rebuilt again, at the cost of the taxpayers who weren’t stupid enough to live in a place that floods in the first place. 

We also discussed workmen’s compensation insurance.  This is coverage that is required for any business with three employees or more.  This is available on the private market, but if you are inexperienced in the field you are trying to get coverage for, or if you have had WC in the past and have had claims, you cannot get insurance on the private market.  But, the federal government requires private companies to take a percentage of these policies, based on the number of policies they have.  So, if you are a company that writes fifty percent of the workmen’s comp in your state or region or whatever, you have to take fifty percent of these “high risk” policies.  This is a bad deal for the customer and the insurer.  The customer has no say so in who writes his policy.  He is assigned a carrier by the NCCI, National Council on Compensation Insurance, or the plan.  The carrier is required to take these risky businesses, who may have an increased number of claims. 

In all fairness, the workmen’s comp deal is fairly well structured, but the rates are higher than on the private market.  Remember, the government is not subsidizing this coverage, so the cost is borne entirely by the small businessman. 

This is exactly what the government wants to do with your healthcare.  They want to require you to buy insurance, require your company to buy you insurance, and they want to dictate the coverage you get.  They want to have a healthcare exchange, much like the plan, that sprinkles in people with health issues amongst the folks who are healthier.  On the surface, this seems like a good idea.  The problem is that the companies that are required to provide this coverage will be under the government’s thumb, and they will be told what to write for whom and how much coverage they have.  It doesn’t sound much like “choice” or “competition” to me. 

The healthcare summit consisted basically of both sides tossing out talking points.  The Democrats had one letter after another about sad stories from people who had lost their coverage or been damaged by their doctor or whatever.  The Republicans, who got about 25% of the talking time, kept trying to get the idea across that an incremental approach might be better, that this bill that was drafted by Democrats behind closed doors needed to be discarded and a truly bipartisan bill needed to be drafted.  At the end, nothing happened. 

Now, I have explained in few words how two non-healthcare related government run insurance plans work.  Is this what you want for your healthcare?  No insurance if there’s a budget problem?  Required coverage that is more expensive than what’s available on the private market?  Insurance that promotes bad behavior? 

If this is what we are in for, thanks, but no thanks.  The truth here is that the Obama White House and the Democrats in the House and Senate aren’t interested in real reform.  All they are interested in appears to be getting more control of your life. 

I have mentioned in this blog before about pre-existing conditions.  This is a big item to the Democrats.  The government wants to REQUIRE a private company to insure people regardless of their health history.  This is like you purchasing an auto insurance policy and then requiring the company you just bought coverage from to repair your car from an accident you had a year ago.  It takes away any control of the company’s business from the company. 

Maybe if we bought our coverage on the open market, prices would fall.  Maybe if doctors didn’t order tests that are only marginally required in order to prevent losing their livlihoods, the cost of healthcare would fall. 

The summit did touch on tort reform.  But here’s what the president thinks is a good idea.  Instead of looking at tort reform like what Texas has done, which has resulted in fewer suits, more doctor recruitment, and lower healthcare costs, he wants to incentivize states to experiment with tort reform, and as long as they don’t do anything to offend him (and his trial lawyer buddies) he’ll allow them to proceed.  Does it sound to you like he is committed to tort reform?  I guess since the cost of tort reform is only $50 billion dollars, it’s not important.  But what he doesn’t seem to get is that the cost of defensive medicine is also part of the problem, and it’s not included in the $50 billion. 

Obama’s real problem with health insurance companies seems to be that they make a lot of money.  I thought that was the idea.  Businesses are in business to make money, to make a profit and pay dividends to their shareholders. 

Oops.  Sorry.  That’s free market stuff.  The president must not be intelligent enough to understand that.

Government insurance is a debacle anywhere it’s tried.  Workmen’s comp is tough to write and tough to classify, and it’s hard to pay for.  NFIP is basically flawed in that it doesn’t provide a means to relocate the home, which would prevent future losses. 

The government needs to butt out of this.  If they want to cover people who don’t have coverage, put them on Medicaid.  If they want to cover people who have lost their coverage due to claims, or who have preexisting conditions, Medicaid.  We all end up paying for it with more taxes anyway.  But leave my stuff alone.  I don’t need to be controlled by a narcissist like Barack Obama.

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