“In this light, the public option would actually have represented a net decrease in statism. The major components of the healthcare “reform” that everyone agreed on were a naked power grab by a state-enforced cartel, forcing the entire population to purchase insurance at cartel prices and taxing the public to buy it for those who can’t afford it. The public option, on the other hand, would have been entirely self-financed after the initial seed money of a few billion, and nobody would have been forced to buy it. But it would have offered price competition to members of the insurance cartel.”[1]
“There’s ALSO a government owned private health insurance company called Medibank Private, and it doesn’t strictly have a profit motive. It just has to stay in business. And it does, because it’s independent.” What’s private about something owned by the government?
Also, when is it a natural requirement to have insurance? Regardless of the bureaucracy behind it, when is it right to have everyone insured at the expense of a taxpayer? Health care cost are high due to government intervention, to counter this situation, the government makes sure everyone is insured, which makes overall cost go up instead of down. If the government pulled out all together the prices would fall to reflect real prices.
No what? Are you denying that a public option puts out of business other low cost insurance plans? (meaning, other plans which cover roughly the same things) You are already forced to pay for it? Wouldn’t it be redundant to pay for it again? I said that artificially higher cost insurance plans would exist. Isn’t that what your “What can you do to make it worth MY while” plans are?
Except the public insurer doesn’t reflect all the costs that a private insurance agency would. First, it could do it through the tax code, because other private insurers would be taxed, and it would not, which is a subsidy to it’s costs. So it undercuts them there. And then you have start up subsidies, where government acts like the venture capitalists. So those costs aren’t reflected there. If there are price controls on selling to government programs, then that’s another subsidy that doesn’t reflect in it’s costs. And let’s just assume that none of this actually happens. It’s still a government program, and so when people go to lend to it, many people will see it as a smaller risk because it’s likely that if that company starts to fail, it is seen that the government probably won’t let it fail, and try to get it back up on its feet. This will tilt the field in their favor. So merely by that fact, it “undercuts” its competitors, not by being efficient, not by cutting costs, but merely because the government is behind it. The “free market” insurance companies are in a different niche, and so they don’t compete with government. And all of this is besides the calculationarguments I made earlier in this thread.
And so the costs are completely severed from the consumer, and it get’s over utilized, and no shopping around happens, so there’s no price competition. Unless you have price controls to stop costs from going too high, in which case there are probably shortages of physicians. Or there could be set rates based on costs to the providers. In which case there is no incentive to innovate.
These are bigger problems than going bankrupt over medical costs, because these are the things that actually drive us towards saving more lives. It is not worth stopping (or even slowing down) the former at the cost of the latter. Besides that, 95% of this problem is solved by Fraternal associations. Seriously, read this article by a physician back in 1910. He literally thought it was a problem that so many working poor were able to access health care because of Fraternal associations. Back then around 1/4 of all adults in America were part of these associations, and they were most popular among the poor. They were even more prevalent in Australia and Great Britain.
if the only functions government can perform are taking away your life, liberty and property, how can government intervention increase those goods and services?
I am going to assume he is the one writing all that…
So it does crowd out private provision of care in those areas. Thanks for the concession. BTW, are you compelled to have insurance in Australia? If so, why?
Because the government can compel funds for its ventures, that is why. It does not procure them on the basis of being more efficient at ANYTHING other than theft. Not sure what the rest has to do with… anything.
The bolded is correct. The rest is rather empty rhetoric. What is he even talking about? What is a “good” policy reason, pray tell?
Firms are owned and run by and comprised of people…
Not sure what this pertains to.
Give them the right incentives, and Health Insurance Companies will find a way to make a buck out of them.
Yes you are required to have health insurance in Australia. If you don’t buy it, then Medicare covers you no matter what. Then they have some 1% tax on everybody to pay for it.
I don’t get the economics. How can the govt afford to make it cheaper? Are they better businessmen than the private health care companies? Of course not. Proof: No govt in the history of the world has ever done anything else more efficiently than the pvt sector. Second proof: They are not using their money, but the taxpayer’s money. So of course it must be that they care less about wasting money than a pvt person running his businness.
So once again, this strange creature in our midst, a govt agency that is cheaper than the pvt sector. There are only two possible explanations for this miracle. Either they are offering inferior service or they are indeed operating at a loss [or both].
If they are offering inferior service, then what’s so great about them? Why all the excitement?
If they are operating at a loss, that means what they collect is not enough to cover their expenses. Which means th emoney has got to come from somewhere. Which means taxes. So they only LOOK cheaper, but have hidden ways of collecting the money. Either they collect taxes or print money [=inflation] or borrow it at interest that guess who will have to pay?
Let us not forget that some people may not want insurance in the first place. For them ceratinly the price is way too high.
Now the medium to long range consequences of the govt operating businesses at a loss means they have to take mnore and moreof your money every single year. So the country gets more and more impoverished. Which means the “free” health care is costing a lot more than you think.
96% percent of the people getting medicare [or is it medicaid] in the US are very happy. But of course they are. They are getting much better than they pay for. And the system is on the verge of bankruptcy.
This is my potential reply. I’d like some feedback on any holes in it first though. Am I proving too much? Are there assumptions I need to explain?
So it does crowd out private provision of care in those areas, which decreases competition artificially.
It’s giving government favor to a specific company even though other companies are better at doing the same thing. It’s like asking why a tariff is bad. It stops people from buying from the actual cheapest source. When you institute a public option like that, you stop all the competition at that level. And when people no longer compete at that level of coverage, prices stagnate, and at worst they go up. So you start paying more or get less than you would have been able to get if you were able to keep that money in your pocket to shop around in the first place. Now this works out for you initially if you are a net consumer in this deal (those that get better insurance than they could afford), but as time goes on you lose out on the savings of cost reduction driven by competition and innovation.
It’s an artificial barrier to entry. If you can get costs down lower than your competitor merely by being efficient, it’s anti-capitalistic for government subsidize the competitor so much that it becomes able to undercut you. It props up the inefficient, and weeds out the efficient.
That doesn’t address what I was saying. I’m talking about price shopping not on the insurance level, but on the medical costs level. There is no price shopping for medical providers. Everybody just thinks “why not, the insurance will pay for it” instead of saying “hold on doctor, how much does that test cost”. That isn’t just true in Australia, it’s true here as well.
I forgot to add the part about getting rid of the AMA. The licensing abilities given to the AMA destroyed the fraternal associations ability to provide low cost medical care. And and the U.K. the government took over and started setting physician fees. Also the fact that it’s voluntary helped in competition amongst the different fraternal societies, so that those societies would keep their insurance costs low. And here’s what separates fraternal societies from insurance companies. Within the fraternal societies, everybody had an incentive to make sure that the other members weren’t abusing the system, and would put social pressure on them in order to keep their premiums down.
Also, how do you know what the proper price is? You don’t, nobody does except the consumer and producer deciding if the care is worth the resources and vice versa.