Is Obama’s Plan A Backdoor Attempt At Single Payer Healthcare?
For over seventy years, Democratic presidents have attempted to overhaul our healthcare system with the ultimate goal of establishing a single-payer plan. Franklin Roosevelt’s original vision for Social Security included universal health coverage, but he was unable to muster the political support needed to make it a reality in 1937. In later years, Harry Truman and Lyndon Johnson both tried and failed to pass single-payer legislation. Most recently, we witnessed the spectacular failure of Bill and Hillary Clinton in their botched attempt to reinvent the system.
President Obama believes that the political and economic climate of the moment presents the perfect opportunity for him to accomplish what his predecessors have been unable to achieve, but his current proposal falls short of government run universal coverage. This has enraged many of his most liberal supporters, who believe he is their best chance to achieve their utopian ideals. At the same time, it has caused some conservatives to soften their opposition since it does not represent an outright nationalization of the largest sector of our economy. Regardless of our political views, it is essential that we all recognize Mr. Obama’s plan for what it is; a backdoor attempt to impose single-payer universal coverage.
The central point of the President’s program is a government run plan to compete against private health insurance companies. He claims that this is necessary to encourage competition in the marketplace. With over 1300 health insurance companies operating in the U.S., it’s hard to believe that lack of competition is the biggest problem we face. The long-term goal of the government plan is not to encourage competition, but to ultimately put the private insurers out of business. At that point, the government plan will be our only remaining option.
Before you call me an alarmist, I ask you to consider this question. Is it truly possible for private companies to compete on a level playing field against the federal government, when the government has the ultimate authority to determine the rules of the game? Once the government plan is in place, what is to stop the Feds from stacking the regulatory deck in their own favor?
The business of insurance is based on the concept of actuarial risk. Individuals or groups pay premiums based on the risk they represent. In a rational system, young healthy individuals pay substantially lower premiums than older individuals or those with pre-existing conditions. This strikes many as fundamentally unfair, but the business of insurance is not about fairness or need. It is about precise statistical modeling, and the private insurers cannot exist without the ability to place a price on predictable risk.
While private companies have to make a profit in order to remain in business, the government operates under no such constraint. In spite of countless trillions in unfunded future obligations, the willingness of our elected representatives to spend borrowed money apparently has no limits. This fact alone will make it impossible for any private company to compete against the government plan. The government can simply undercut the rates of the private insurers, and our lawmakers will be perfectly happy to add the annual shortfall to our already incomprehensible national debt.
Once the government plan is in place and the regulators do their predictable mischief, the situation for the private insurers will only get worse. It is not hard to imagine new federal regulations that require all plans to offer the same level of coverage as the government plan, or to require private insurers to offer uniform pricing without regard to obvious risk factors. Over time, the increasingly onerous burden on the private insurance companies will drive them out of existence.
President Obama has not put forth a single payer plan because he knows that he cannot muster the political support to nationalize our entire healthcare industry in one fell swoop. He has learned from the mistakes of the Clinton’s, and he is savvy enough to realize that what he cannot accomplish directly through legislation, he can achieve indirectly through so-called competition. If the government plan becomes a reality, it’s a safe bet that a single-payer system will not be far behind.
Real insurance WAS based on risk (hence the term “risk-pool”). That business model is gone. Insurance companies are now simple financial transfer and investment companies. Risk pools were much lower margin…no multimillion bonus packages for execs. They did not have investors expecting huge growth in stock value. Insurance companies collect subscription fees and pay claims, in order to experience increasing profits, they must increase fees and reduce payments. Managed care was created to recycle payments back into the system as another fee (I know, I was there as this came into being and was adopted by every company…it looked like a clever way to recapture revenue, but we weren’t thinking about health). The business plan became very simple: capture fees, invest in the highest-yeilding (and, of course riskiest) assets we could, claiming those investments as “reserves” against future claims, and then deny or delay payment of those claims, and blame the doctors for jacking up their prices (because we always paid less than the claim).
Health Insurance is a diversion from the real issue of health care. It diverts money and attention from medicine…because that is precisely the business insurers are in.
Currently, I greatly enjoy my ’socialized’ police, schools, libraries, roads, fire department, and teachers. I would love to see the for-profit HMO’s go away. They were only instituted under Nixon because he knew that his conservative cronies would make tons of money by injecting themselves between the patient and doctor, and thus take a cut of our money. Canada’s health care system, as well as several others in the world, are superior to our own bloated system. I sincerely hope to see single payer health care in my lifetime. And if they were to legalize marijuana and tax it, this income would easily pay for health care for all.
HMO’s were the brainchild of Ted Kennedy. Funny how this new bill is supposed to be in his honor. The man who drove drunk and killed a young woman, and got away with it!
It has come to this point because yea the private companies need profit to stay in business but not multimillion dollar profit where the money goes to CEO’s pockets and not on patient care, lowering costs which are always rising and offering better services. There is no type of health insurance that everyone can get as there is too much money in health insurance and no restrictions big restrictions on how they operate due to the amount money that is spent in the industry with 2.26 trillion spent in 2007. If there was health care reform and this gives competition against the health insurance companies then hopefully more people will be insurance and able to receive health care.