“Healthcare Nationalized” and competition
One of the arguments now being heard from the Democrats in Congress and President Barack Hussein Obama, who are pushing the nationalization of healthcare, is that the addition of government provided healthcare insurance will provide competition within the industry. My dictionary has a couple of definitions for competition and the Democrats, as far as I can tell, give no definition for their concept of competition. Therefore, I will use the following definition: “competition: 1: the act or process of competing: rivalry: as (a) the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms.” Merriam-Webster’s Collegiate Dictionary, tenth edition; Merriam-Webster, Incorporated; Springfield, Massachusetts, U.S.A. © 1995; page 235.
The third party, of course, is the American consumer. The other parties include all insurance companies that provide healthcare insurance and the new proposed additional party—the federal government offering an insurance alternative in “competition” with the presently existing insurance companies.
I don’t know how many different insurance companies presently offer healthcare insurance coverage throughout the United States. Presently, insurance companies are generally regulated State by State with some federal requirements. Thus, there are, at least, fifty-one regulatory sets of rules. Taking a quick look at the Peoria area “AT&T Real Yellow Pages,” there are four HMO’s and two health plans listed under the heading of health. Also, there are thirteen pages of companies listed under the heading of insurance many of which offer health insurance but certainly not all.
I would argue that presently there is competition in the field of health insurance. Any basic restricts on said competition is more because of State and federal regulations rather than because of restrictions that occur under a free market system.
I admit that insurance companies are not perfect and that there certainly are problems in the field—many of which though are government created. I’ve had both positive and negative experiences with insurance companies. After a renter’s child tried to burn down my rental property, I fought for over a year to receive what I considered a fair reimbursement. I’ve also had fair and quick payment for covered damage. And of course, at the beginning of this blog is a warning in relation to Farmers Insurance Group.
However, do any of the present problems with health insurance companies merit the injection of the federal government into the competitive mix? And, will such injection increase or decrease competition?
For our purposes though, let’s take the position that there is a need to increase competition. Will the addition of the federal government as a health insurance provider accomplish that end?
An obvious axiom of a free market system is that no company can continue to exist over a period of time without making a profit. The profit motive is a compelling component of the free market system. However, that profit motive is not a negative but a positive for the system. Profit is a motivation to offer “the most favorable terms” in order to obtain the business of the consumer.
However, by definition, the federal government is NOT motivated by the profit motive. Thus, it doesn’t matter to the government if its enterprise—health insurance in this instance—makes a profit or not. Therefore, the federal government can set its prices lower and/or provide greater coverage than any free market insurance company. This lower price and/or greater coverage, however, are not the result of efficiencies within the field. The federal government can and, obviously, does choose to use deficit spending to provide prices and/or greater coverage that are not possible by a company that can’t exist without a profit. In yesterday’s post the social security system collected 32% of the 2007 fiscal year budget. Yet, 38% of the 2007 fiscal year budget was spent on social security programs. Deficit spending theoretically can go on as long as necessary until every free market company is driven from the field. Where is the competition?
However, that is not all. If one actually examines the 1017 page bill before the House Energy and Commerce Committee, the bill provides that the federal government will determine the rules for healthcare and healthcare insurance within the country. For example, some of the sections of the bill include the following:
00) SEC. 101. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.
01) SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.
Subtitle B—Standards Guaranteeing Access to Affordable Coverage
02) SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.
03) SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.
04) SEC. 113. INSURANCE RATING RULES.
05) SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND SUBSTANCE ABUSE DISORDER BENEFITS.
06) SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.
Subtitle C—Standards Guaranteeing Access to Essential Benefits
07) SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.
08) SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDATIONS; ADOPTION OF BENEFIT STANDARDS.
Subtitle D—Additional Consumer Protections
09) SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY HEALTH INSURERS.
10) SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.
11) SEC. 136. STANDARDIZED RULES FOR COORDINATION AND SUBROGATION OF BENEFITS.
12) SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH CHOICES COMMISSIONER.
13) SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.
14) SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND DEPENDENT COVERAGE.
15) SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.
16) `SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
17) SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.
18) SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN WHEELCHAIRS.
19) SEC. 1147. PAYMENT FOR IMAGING SERVICES.
20) SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS MEASUREMENT.
Subtitle C—Provisions Related to Medicare Parts A and B
21) SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOSPITAL READMISSIONS.
22) SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM PLAN AND BUNDLING PILOT PROGRAM.
23) `SEC. 1866D. CONVERSION OF ACUTE CARE EPISODE DEMONSTRATION TO PILOT PROGRAM AND EXPANSION TO INCLUDE POST ACUTE SERVICES.
24) SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010.
25) SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY PROGRAMS.
I’ve always argued that if those involved in a discussion with me allowed me to define the terms used in the argument, I’d never lose an argument. The same is true for setting the rules of the game. By definition, the federal government WILL NOT be acting independently—one of the basic concepts in competition. How can any free market company realistically compete with the very entity—the federal government—that is defining and determining the rules of the competition? In the long run, THEY CAN NOT!
This so-called competition, to use a sport’s example, would be similar to the New York Yankees playing a baseball game against the University of Arizona baseball team at Yankee stadium with the umpires being on the Yankee’s team and a requirement that the game will not end until the Yankee’s are winning. It IS NOT COMPETITION! It is a guarantee that ultimately the federal government will be the ONLY provider of healthcare insurance and eventually of healthcare in the nation. The bill is stacked against the free market system and in favor of GOVERNMENT CONTROL!
As I wrote in yesterday’s post: “Yet, the federal government believes it is necessary to spend even more money to take control of and ‘save’ healthcare from the clutches of the evil free enterprise system. Given our past experiences of the federal government ‘saving’ us through previous programs, just how confident are you that the government will ‘save’ us by taking control of healthcare? But wait, President Barack Hussein Obama has promised us ‘change you can believe in.’ If you believe in MORE government control, and MORE taxes, and MORE deficits, and MORE rationing, you will receive ‘change you can believe in!’
The fiscal year 2007 budget deficit—$0,162,000,000,000 in the red. The projected deficit for the fiscal year 2009 budget after 2+ years of a Democratic controlled Congress and approximately 7 months of a Barack Hussein Obama Administration—$1,500,000,000,000 in the red! Over a TRILLION dollars more!!! CHANGE that you can BELIEVE in?!?
Do you STILL believe that NONSENSE?”
One of the arguments now being heard from the Democrats in Congress and President Barack Hussein Obama, who are pushing the nationalization of healthcare, is that the addition of government provided healthcare insurance will provide competition within the industry. My dictionary has a couple of definitions for competition and the Democrats, as far as I can tell, give no definition for their concept of competition. Therefore, I will use the following definition: “competition: 1: the act or process of competing: rivalry: as (a) the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms.” Merriam-Webster’s Collegiate Dictionary, tenth edition; Merriam-Webster, Incorporated; Springfield, Massachusetts, U.S.A. © 1995; page 235.
The third party, of course, is the American consumer. The other parties include all insurance companies that provide healthcare insurance and the new proposed additional party—the federal government offering an insurance alternative in “competition” with the presently existing insurance companies.
I don’t know how many different insurance companies presently offer healthcare insurance coverage throughout the United States. Presently, insurance companies are generally regulated State by State with some federal requirements. Thus, there are, at least, fifty-one regulatory sets of rules. Taking a quick look at the Peoria area “AT&T Real Yellow Pages,” there are four HMO’s and two health plans listed under the heading of health. Also, there are thirteen pages of companies listed under the heading of insurance many of which offer health insurance but certainly not all.
I would argue that presently there is competition in the field of health insurance. Any basic restricts on said competition is more because of State and federal regulations rather than because of restrictions that occur under a free market system.
I admit that insurance companies are not perfect and that there certainly are problems in the field—many of which though are government created. I’ve had both positive and negative experiences with insurance companies. After a renter’s child tried to burn down my rental property, I fought for over a year to receive what I considered a fair reimbursement. I’ve also had fair and quick payment for covered damage. And of course, at the beginning of this blog is a warning in relation to Farmers Insurance Group.
However, do any of the present problems with health insurance companies merit the injection of the federal government into the competitive mix? And, will such injection increase or decrease competition?
For our purposes though, let’s take the position that there is a need to increase competition. Will the addition of the federal government as a health insurance provider accomplish that end?
An obvious axiom of a free market system is that no company can continue to exist over a period of time without making a profit. The profit motive is a compelling component of the free market system. However, that profit motive is not a negative but a positive for the system. Profit is a motivation to offer “the most favorable terms” in order to obtain the business of the consumer.
However, by definition, the federal government is NOT motivated by the profit motive. Thus, it doesn’t matter to the government if its enterprise—health insurance in this instance—makes a profit or not. Therefore, the federal government can set its prices lower and/or provide greater coverage than any free market insurance company. This lower price and/or greater coverage, however, are not the result of efficiencies within the field. The federal government can and, obviously, does choose to use deficit spending to provide prices and/or greater coverage that are not possible by a company that can’t exist without a profit. In yesterday’s post the social security system collected 32% of the 2007 fiscal year budget. Yet, 38% of the 2007 fiscal year budget was spent on social security programs. Deficit spending theoretically can go on as long as necessary until every free market company is driven from the field. Where is the competition?
However, that is not all. If one actually examines the 1017 page bill before the House Energy and Commerce Committee, the bill provides that the federal government will determine the rules for healthcare and healthcare insurance within the country. For example, some of the sections of the bill include the following:
00) SEC. 101. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.
01) SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.
Subtitle B—Standards Guaranteeing Access to Affordable Coverage
02) SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.
03) SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.
04) SEC. 113. INSURANCE RATING RULES.
05) SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND SUBSTANCE ABUSE DISORDER BENEFITS.
06) SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.
Subtitle C—Standards Guaranteeing Access to Essential Benefits
07) SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.
08) SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDATIONS; ADOPTION OF BENEFIT STANDARDS.
Subtitle D—Additional Consumer Protections
09) SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY HEALTH INSURERS.
10) SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.
11) SEC. 136. STANDARDIZED RULES FOR COORDINATION AND SUBROGATION OF BENEFITS.
12) SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH CHOICES COMMISSIONER.
13) SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.
14) SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND DEPENDENT COVERAGE.
15) SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.
16) `SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
17) SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.
18) SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN WHEELCHAIRS.
19) SEC. 1147. PAYMENT FOR IMAGING SERVICES.
20) SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS MEASUREMENT.
Subtitle C—Provisions Related to Medicare Parts A and B
21) SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOSPITAL READMISSIONS.
22) SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM PLAN AND BUNDLING PILOT PROGRAM.
23) `SEC. 1866D. CONVERSION OF ACUTE CARE EPISODE DEMONSTRATION TO PILOT PROGRAM AND EXPANSION TO INCLUDE POST ACUTE SERVICES.
24) SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010.
25) SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY PROGRAMS.
I’ve always argued that if those involved in a discussion with me allowed me to define the terms used in the argument, I’d never lose an argument. The same is true for setting the rules of the game. By definition, the federal government WILL NOT be acting independently—one of the basic concepts in competition. How can any free market company realistically compete with the very entity—the federal government—that is defining and determining the rules of the competition? In the long run, THEY CAN NOT!
This so-called competition, to use a sport’s example, would be similar to the New York Yankees playing a baseball game against the University of Arizona baseball team at Yankee stadium with the umpires being on the Yankee’s team and a requirement that the game will not end until the Yankee’s are winning. It IS NOT COMPETITION! It is a guarantee that ultimately the federal government will be the ONLY provider of healthcare insurance and eventually of healthcare in the nation. The bill is stacked against the free market system and in favor of GOVERNMENT CONTROL!
As I wrote in yesterday’s post: “Yet, the federal government believes it is necessary to spend even more money to take control of and ‘save’ healthcare from the clutches of the evil free enterprise system. Given our past experiences of the federal government ‘saving’ us through previous programs, just how confident are you that the government will ‘save’ us by taking control of healthcare? But wait, President Barack Hussein Obama has promised us ‘change you can believe in.’ If you believe in MORE government control, and MORE taxes, and MORE deficits, and MORE rationing, you will receive ‘change you can believe in!’
The fiscal year 2007 budget deficit—$0,162,000,000,000 in the red. The projected deficit for the fiscal year 2009 budget after 2+ years of a Democratic controlled Congress and approximately 7 months of a Barack Hussein Obama Administration—$1,500,000,000,000 in the red! Over a TRILLION dollars more!!! CHANGE that you can BELIEVE in?!?
Do you STILL believe that NONSENSE?”
posted by Christian Gunslinger at 3:52 AM
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