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Thursday, June 11, 2009

President Obama's Public Insurance Option Misdirection

President Obama held the first in a series of townhall meetings today in an attempt to build public support for his plans to overhaul the health care industry. During the townhall meeting, President Obama not only stressed the urgency of passing health care reform but endorsed the public option for health insurance. He defended agains charges that it is a road to socialism.

There are some folks who say ‘socialized medicine.’ You hear that all the time: ‘socialized medicine,’” Obama said. “Well, socialized medicine would mean that the government would basically run all of health care. … Nobody's talking about doing that, all right? So, when you hear people saying ‘socialized medicine,’ understand: I don't know anybody in Washington who is proposing that – certainly not me.

“Don't let people scare you,” he added. “If you like what you've got, we're not going to make you change.”

“I've already said, if you've got a private plan that works for you, that's great. But we want some competition. If the private insurance companies have to compete with a public option, it'll keep them honest, and it'll help keep their prices down.”

Now, to hear the president say it, he only wants to make reasonable improvements to a system that is broken. Yet, in this so called broken system, the president also says that most people won't see anything change since they should already be happy with their coverage. Something here doesn't add up.

First, the president says he only wants to increase competition to the private market by adding an option for public health insurance. This will keep private insurance companies "honest". Here's what the president is not telling you. There are well over 1000 private insurance companies. Is one other company really going to keep them "honest".

The only thing dishonest is the innocent assertion that President Obama is making about the public option. With over one thousand different companies offering health insurance, the problem is NOT a lack of competition. The problem is in fact the configuration of the competition. In health insurance, regional monopolies are created in part because health insurance providers enjoy an exemption from the long standing Sherman Anti Trust Act. As such, most states are dominated by one health insurance provider.

Rather than fixing this problem, the president would have us believe that the problem will be solved by offering health insurance backed by the government. The problem with this idea is simple and never addressed by the president. It's inherently an unfair competition when a government run plan competes against a private plan. The government has unlimited resources and private plans do not. At some point, everyone will want the government plan because it will always be cheaper. (though ultimately we all pay for it with bigger taxes)

The president continues with his misdirection.

“There are things that can be done that – Republican, Democrat, liberal, conservative – we all know need to happen. The challenge is going to revolve around how do we deal with the 20 percent of the stuff where people disagree?” Obama said. “This whole issue of the public plan is a good example, by the way. I mean, right now, a number of my Republican friends have said, ‘We can't support anything with a public option.’ It's not clear that it's based on any evidence, as much as it is their thinking, their fear that somehow, once you have a public plan, that government will take over the entire health-care system.”

Now, the president presents himself as the beacon of bi partisanship and the Republicans as obstructionist ideologues. There's something he isn't saying here as well. He wants the Republicans to compromise on the public option but is unwilling to compromise himself. Why, for instance, doesn't he offer to include health savings accounts into the the comprehensive health care reform plan? That's an idea that Republicans have been championing for years. Yet, the president won't make the type of commitments of himself that he demands of others.

The president ends with one last piece of misdirection.

“We’ve got to admit that the free market has not worked perfectly when it comes to health care,” Obama added. “That's why I've said that I think a public option would make sense.”

This a very common piece of misdirection by those that want to meddle in health care. They act as though health care is different and so we can't let the "free market" work in this field. The fact is that it isn't the free market that is failing the health insurance industry, but the forces that stop health insurance from being a free market. As I said earlier, health insurance allows for regional monopolies. That, by definition, is NOT a free market. So, the president identifies a problem that doesn't exist and tries to solve something that isn't broken.


tom said...

You are either a shill fore the insurance companies or simply are not very intelligent.
According to your way of thinking, we should get rid of medicare. That is govt. run healthcare. Oh God! They snuck a socialist program on us!!
Please, will fear-mongerers like you stop scaring people with lies. Without Obama's plan, everyone will be better off on welfare rather than working. Is that what you want?

mike volpe said...

yeah, medicare is great except that there is about 35 trillion dollars in unfunded liabilities. In other words, the only problem with medicare is that it's broke. Medicare is not the model we want to use because then the whole system would break.

In a perfect world I would get rid of medicare however millions of seniors spent their entire life paying into the system and now they are owed the health care coverage they paid into. That said, using medicare as a model of great government run health care misses the tiny point that medicare is broke.