Is there a cogent argument that explains why government ought not to offer health insurance?

Great Debates
1

I’ll get on the “republican/conservative/capitalism” bandwagon here and admit it: competition is great, grand, and tends to generate the best outcomes

So… why can’t the government act as a market participant? why shouldn’t the government be allowed to spend some money, set up a national government insurance company, charge all willing participants a premium that is actuarially sufficient, negotiate with providers for billing rates, and compete directly with private insurers?

what is the ostensible reason opposing such an event?

(there is only one assumption you must make in your arguments: that government will not use its law/rule-making authority to improve its competitiveness. By this i mean directly passing laws that would negatively impact private insurers (e.g. “Aetna, you can’t insure in county X”, or “pay no taxes if you sign up with us!”) (i fear that if i don’t add this proviso, this thread will quickly turn into something resembling a diatribe on the socialist direction our country is headed. just assume that the US government is capable of leveraging market/economic power but incapable of leveraging their monopoly on force and taxation)

2

In very, very general terms . . . because private insurers cannot “compete” with the government, since the government comes to the competition with all the power stacked in its favor. There’s also the fact that people voluntarily interact with private insurers, but are forced to interact with the government.

3

The charges (monthly premiums) would end up costing the same or more than what existing private insurers already cost.

There is no feedback mechanism in government bureaucracies to control costs. (Look at the endless jokes about excessive military spending.) Since there is no incentive to control costs, everybody’s premiums on the govt insurance keeps going up.

If the government health program deliberately tries to make its insurance more affordable by capping its premiums so more people can participate (e.g. low-income families), then you will have a very short list of “approved” doctors, pharmacies, etc that would be willing to accept the government’s lower reimbursements.

If you do the math, you’ll realize you haven’t accomplished anything with your idea.

Now, if what you really want is for the those voluntary premiums to be converted into involuntary taxes, that’s a different beast.

4

Initially, because the money needed to fund such a venture would have to come from somewhere, and at least the start up capital would have to come from federal taxes.

5

Not so.

Cite: Canada

6

The idea of health insurance at all is a fairly recent idea, at least in the US. The costs for an employee’s family health became part of a company total compensation package to lure in and retain good employees.

How this has become a fundimental right is a great debate question. What to do about it? People need to be treated. Who will decide what that treatment is and who gets it?

A lot can be learned from the experiences of other countries where government health care has been in place for many years.

7

Read the OP carfefully. He’s saying the private insurers would continue to exist side by side, competing on the same service offerings.

That’s not Canada’s situation. The private insurers in Canada are supplemental (e.g. prescription drugs, uncovered procedures, etc).

8

That’s fine. It being a freely-electable insurance program, customers that don’t like the price can always walk away. In my question there is no requirement that you sign up or stay signed up. But let’s assume there are a few features of the program: it accepts anyone and it has no profit motive.

So why the resistance to trying it? A few billion dollars in start up costs?

9

If you think “interacting with insurance” is always “voluntary”, you’ve never had a kid with a chronic, life threatening health condition…Just FYI

10

Like what? their labor pools are more attractive to multinational companies and they don’t have legions of people going uninsured or going into bankruptcy to eliminate healthcare-derived debt? those kinds of lessons?

11

The government doesn’t need to make a profit so it will drive all of the competition out of business.

12

The number one problem with this plan is that the government would automatically have an advantage over the the other insurance companies because the money to start such a venture would come from the coercive taxes taken in part from the other insurance companies.

13

boo fing hoo.

let’s modify the scenario, then: bill gates and warren buffet suddenly decide to expend their entire fortunes on operating a not-for-profit health insurer that accepts everyone.

14

The Canadian government isn’t competing against insurance companies.

Figure that if the government offered insurance in the US like a normal business, unfunded by taxes, but pledging to cover everyone, then what happens is that everyone who can’t get insurance with a company gets government insurance. However, the people who take government insurance are the people who can’t afford insurance to begin with, so the government isn’t going to be collecting any money, only paying out.

The government would need to interest people with regular jobs, but what motive do they have to join US government insurance? If the government tries to match the ~$4000 per person per year payout currently being spent by insurance companies, they’ll have to charge more because they’re trying to support all the people without a decent income as well as you. If they don’t match what insurance companies are paying out, why switch to government insurance?

15

Ahh my mistake then. I agree the government acting as private insurer wouldn’t do as good as Canada. It could prolly keep some costs down though, if ran like the post office, so I think it might be able to outdo some companies. Also it could be a good gateway to get people used to the idea of UHC.

16

assume this isn’t the case. assume the year the government insurer starts up, health insurances are given a one-time tax credit equal to their tax bills for that year.

17

You want it all but you can’t have it all.

If you accept “anyone”, then you must deny care (rationing) to many of your policy holders so there’s money left for other policy holders.

If you don’t deny care, then you must refuse some unhealthy applicants (pre-existing expensive heart conditions, cancer, etc.)

Just because you eliminate the profit motive doesn’t mean health care becomes cheap or widely available to any and all willing participants.

18

Ok… so, how much in profit does Healthcare Conglomerate X make in a year? Is this close in value to the amount that Healthcare Conglomerate X would’ve spent paying for the medical costs of the “deemed uninsurable”?

(edit: if we’re now talking about how costly it would cost for “government insurance co.” to cover all the really unhealthy people, reduce the amount we spend in society already to address the needs of these unhealthy folks)

19

This is one of those arguments that both sides can feel works for them.

In reality works for the middle. In England where they have UHC, people still sometimes get private healthcare.

It’s mainly a question of if other companies can put in value-adds that out do any cost advantages of the government.

20

Are you happy that some of your health insurance premiums are going to the profit margin of a private company? Are you willing to pay more for insurance to ensure continued dividends for health insurance stockholders, and to ensure bonuses to health insurance company execs? If so, then you can stick with a private health plan.