Last month Arindrajit Dube wrote a guest post for us analyzing private insurer stock market returns following the news that the Senate Finance Committee “Group of Six” would be dropping the public plan; he estimated that avoiding a public plan would be worth $28-35 billion to three major insurers. Last week he did a similar analysis based on last Sunday’s comments by Kathleen Sebelius and Robert Gibbs indicating potential willingness to drop the public plan (something the administration has tentatively backpedaled from). I was on vacation, but his analysis is available on Economist’s View, and his bottom-line number is $32 billion, or 40% of their market value.
Dube also co-authored an op-ed in The New York Times on San Francisco’s experience with comprehensive, government-mandated health insurance. One of their points is that in an environment where all competitors are forced to pay something for health insurance, this creates a level playing field where all companies can pass on the higher costs to consumers – as opposed to a situation where companies race to the bottom by cutting benefits in order to minimize costs.
By James Kwak
The Baseline Scenario 
I trust the free market to accurately price the value of political decisions, except for when it’s convenient for me not to.
With congress deadlocked on how not to provide health care (see this bit of underreported news http://www.theonion.com/content/news/congress_deadlocked_over_how_to ), I choose to ignore what the market is telling us.
Is there an actual Public Plan proposal? I would be fine with something like the following:
“LIGHTER VERSIONS Other proposals are circulating that would level the playing field with private plans. They would require the public plan to hold the same reserves as private plans and sustain itself from premium income without drawing on the federal treasury. It would probably pay providers higher rates than Medicare but lower rates than most private plans. Its administrative costs would be far lower, allowing it to offer lower premiums. These more modest versions could be worth having, but they would save individuals and the health care system far less money.”
And I agree with President Obama when he says:
“Supporters of a public option say it will create a badly needed level of competition, ultimately benefiting the public. At a town hall event Saturday in Grand Junction, Colorado, Obama said, “I think that we can craft a system in which you’ve got a public option that has to operate independently, not subsidized by taxpayers — it would be nonprofit … they would have to go on the market and get a market price for capital.”
He added, “I think there are ways that we can address those competitive issues.”
I’m simply lost on where we are with this proposal.
I think the plan is to keep people guessing and utterly confused until 2 years after the plan passes, at which point further confusion will be injected into the public.
The magnitude of America’s stupidity on this is really something.
As somebody put it in a piece I read (I forget which), of all the globe’s people only Americans are willing to pay this tax imposed by the administration, marketing, and profits of this private insurance parasite.
Why are they willing to pay it? Nobody has a coherent answer, because there is none.
The contortions of the economy, politics, and logic; the distortions, the casuistry, the endless poltical anguish, all for this clinically insane imperative to maintain this feudal parasite in existence.
Yet why should it exist at all? No one can answer. It creates literally nothing but cost and complexity, and presides over the social darwinist rationing of health care by wealth. (I suppose that’s the ideological desideratum on the part of right wing psychopaths; but why would anyone else go along with it?)
Compared to the private insurance “industry”, even the Wall St banks seem to create some sort of value (though of course they really don’t).
Corporate welfare is nowhere more extreme, more complete, more nakedly and brutally displayed as the core goal of government policy.
Even the “public option” is an irrational but least-of-evils kludge, again driven by the insane urge to provide private insurance rentiers with some kind of public sinecure. When liberals say the public option is not intended to drive private insurers out of existence completely, I think most of them are telling the truth regarding their own mindset. Even they somehow think we need this maggot-infested corpse hung around our necks.
I don’t even bother with the “public option” anymore. It was always misdirection. They were never going to pass real reform with even the anodyne tweak of a strong public option.
By now all we can hope for is that progressives in Congress who have promised to block any corporatist bill intended to further entrench and enrich the parasite, by leaving the status quo intact while herding together a new conscript market for it with a “mandate”, stand by that promise.
Or be held to it.
this reads more and more like complete madness to me
i.e. “I think we can …”
it may be civil and rational and even adorable but when has it ever worked to rally support this way
– it is an opener to conversations but even for those who have read up on it the subject is way too entangled as that an opening like that could generate anything else than enlightened discussion forever and ever
you in need of affordable insurance are in urgent need of a really devious mean highly talented operator an eminence grise to get the thing going
but with today’s press will anything under the radar still be possible?
Yes clandestine stuff has severe drawbacks but it also has the advantage that all participants can come out of it seeming to be the winner.
let’s imagine for a while there were a private insurer with genuinely high morals and he would offer decent an honest coverage
– how would he survive/finance the first onslaught of the not so desirables?
this is why I think for health insurance the market can never work because the first to become decent would be the first to get broke
Yup. I suppose a liberal would say good behavior across the industry could be conjured up through “regulation”.
But even if that could sort-of work (which I’m sure it would not; it would rather be another stalling tactic, like the notion of having a public option be triggered some years from now if some foggy performance benchmarks weren’t met by the industry; for awhile that was a popular idea for how to gut the public option, but it seems to have faded away), it would still be setting up a Rube Goldberg contraption for no reason at all other than to maintain the parasite.
When all the handringing nonsense is over and done, ‘health care reform’ will mean universal blackmail for the benefit of a tripartite monopoly of drug pushers, insurers and hacksaw artists. President Obama appears to be the greatest fraud in the history of our idiotic election system. Day by day he is pulling the noose tighter and tighter, and I would not be surprised if those upset by monopoly capital scams haven’t seen anything yet.
The magnitude of America’s stupidity on this is really something.
…circularly justifying the social darwinist ideology.