Tuesday, June 30, 2009

Going Public

I received an e-mail from an acquaintance whose husband is dying from stage 4 cancer. She writes:
We have gone from middle class to abject poverty in the space of very little time.

She goes on to report that charities and governmental agencies which once offered assistance to people in her situation are now in desperate straights themselves and can offer little or no help. She has no family and feels alone, abandoned, and terrified.

I’d like to ask everyone where the private health insurance industry is for people like this. Because it seems obvious to me and everyone else who is helping a friend, loved one, or client in this situation that private insurance is not for sick people. It is for healthy people.

James Kwak notes:

“lightly regulated” private health insurance is a fantasy, because the whole point of a for-profit insurer is to charge premiums that expect the expected payout under the policy; as a result, no sick person would be able to afford insurance. You don’t need adverse selection or moral hazard to explain this: if I know someone has an expensive form of cancer, I’m going to charge him $100,000 for health insurance, and he won’t be able to pay. The free market for health care is one in which sick people die, and smart people who ignore that point are being less than honest.

Right now, private insurance companies enjoy a near total monopoly in the healthcare market:

The report, released by Health Care for America Now (HCAN), uses data compiled by the American Medical Association to show that 94 percent of the country's insurance markets are defined as "highly concentrated," according to Justice Department guidelines. Predictably, that's led to skyrocketing costs for patients, and monster profits for the big health insurers. Premiums have gone up over the past six years by more than 87 percent, on average, while profits at ten of the largest publicly traded health insurance companies rose 428 percent from 2000 to 2007.

Far from healthy market competition, HCAN describes the situation as "a market failure where a small number of large companies use their concentrated power to control premium levels, benefit packages, and provider payments in the markets they dominate."

So extreme is the level of consolidation, in fact, that one former top Federal Trade Commission official working with HCAN has sent a letter to the Justice Department's Antitrust Division, asking for an investigation into the health insurance marketplace.

This is not a shock to anyone, but it’s something I have yet to hear our liberal media mention in any discussion of healthcare reform and the public option. The public option, far from being a “Trojan horse” to scary “Socialized medicine” is in fact the only source of competition for a vast healthcare monopoly. And that’s why they are fighting it so hard.

Republicans like to say that competition is a good thing, but no one has explained why health insurance should be the sole exception to that conservative bromide.

Meanwhile, Marsha Blackburn (who has received hundreds of thousands of dollars in donations from healthcare professionals and lobbyists) has said the public option will fail because TennCare didn’t work in Tennessee :

“All approaches for a nationalized health care system simply don’t work, and we saw this with TennCare,” Blackburn said this week during a discussion on the future of employer-based health coverage at The Heritage Foundation.


“This program started to consume every new dollar that was generated in the state,” Blackburn said. Additionally, Tennessee residents who already had private health insurance were dropping their plans to get on the free health program, she said. “We started hearing stories of individuals trying to buy ‘uninsurable’ letters so they could get on TennCare.”
Blackburn seems to think the problem with TennCare was that it was a government program. But if private insurance were so wonderful, why did people want to drop their private coverage and get on TennCare? If private insurance were so wonderful, when 200,000 people were dumped from TennCare, why didn’t private insurance companies come in to pick up those people?

Why are nearly one million Tennesseans uninsured, and another 1 in 6 Tennesseans under-insured? Why haven’t private insurance companies come in to fill that void?

Why are one out of every 50 Tennesseans in “serious medical debt”?

Why does Tennessee get a “weak” rating from the Dept. of Health & Human Services?

According to conservatives, government can’t fix any of our problems, except for healthcare, which it would fix too well, creating an unfair advantage and putting private insurance companies out of business.

Does this make sense to anyone?

As the debate rages on, there are people in real crisis, people like my acquaintance who are literally crying out for help to anyone and everyone who will listen.

We can do better than this. Americans deserve better than this.

[NOTE]: call it a brain fart, call it stress from dealing with a dog with only one functioning limb, call it whatever you wish, but earlier version of this post said "public insurance" in a few places, when what I meant was private insurance.