The "Government Doesn't Play Fair" Argument

“It skews the system. The government never plays fair. . . . because the government would subsidize it . . and there’s no way that you can have a level playing field that could compete fairly with private enterprise.”

-Rep. Tom Price, (R) Georgia, CSPAN 7/26/09

If you can read the above statement and not see the ridiculousness of the statement then read on.

It sounds as if representative Price is confessing that government socialization of health care financing can beat the living crap out of for-profit insurance companies.

One needs to ask “what are the insurance companies doing wrong they would not be able to compete with the government to better insure their own consumers?” And “why didn’t they do it to begin with?” The answer is: Profits. They needed to make a profit for their shareholders and their own executives.

Theoretically if the government health care administration, can deliver, at a minimum, the same or better quality than the health insurance companies, then millions of regular subscribers to for-profit health care will shift their loyalty to the government plan. And if the insurance companies are strategic, if they plan properly to match the benefits of the government plan, then they can stay in business selling health insurance. Keep in mind that many of the same insurance companies also sell automobile, home, and life insurance, for profit, so it’s not like their failure to sell health insurance would wipe them off the map.

So what did they not do that would have prevented their head to head with a government Public Option? First of all they did not insure all who did not have insurance; they didn’t even market health insurance to the twenty somethings (the age group most likely to not have health insurance). Had they just assembled this one age group of a, potentially huge, pool of people they would have seen incredible profits and been able to offer much lower health care insurance premiums to all of their customers. Because large pools of people, who mostly do not get very sick, make excellent health insurance risks for a for-profit insurance company.

They did not invest in administrative research to enthuse the best quality care for the least cost and least paperwork. If the Single Payer system known as Medicare can operate at administrative levels of 3-5%, then the for profit providers should have been able to reduce their administrative spending to far less than their current 17-30% of each dollar they receive.

They did not police their spending outlays. Fraud and abuse is rife within the health care industry. Yes! Those doctors, nurses, hospital administrators and medical equipment companies aren’t all saints! We expect them to be because they are dealing in health care and health care should be ethical across the board. It is likely there is hundreds of billions of dollars of annual health care industry fraud and over treatment that can be recovered if the means to do so is initiated.

They did not apply full coverage to their own customers. They called treatments “experimental” to avoid paying for them. They listed very expensive treatments they would not cover in very small print. They made enemies with the thousands of stories of inadequate coverage that resulted from this for-profit motivated practice.

They formed HMOs that pooled customers into treatments pens, where choice of doctors was limited. They created the high deductible catastrophic plan, which caused the insured to be grossly underinsured, and to avoid the doctor’s office. They charged a family of four an average of $10,000 annually for a health plan. They raised their premiums by an average of 12% per year. They doubled their premium costs in just the last 8 years. They charged small businesses up to twice what they charged large businesses with greater pools of employees.

“It’s not fair! We won’t be able to do that stuff Anymore!
- John Q. Executive, Anywhere Health Insurance Company.