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State health insurance plans compete with private insurance

Competition and universal coverage
(+1, -1)
  [vote for,

Currently in the US, some citizens have private health insurance, some are covered by government health insurance (either MediCare for old folks or various state aid programs for poor young folks), Native Americans get health care thru the Indian Health Service and some veterans can get care thru the VA. And a lot of people have no health insurance.

Private health insurance is not a sure thing. These are for-profit companies and they profit more by paying less. These companies are powerfully motivated to do things that avoid payment. Governmental entities spend considerable effort and expense trying to make insurers honor their obligations, but the profit motive is like gravity. Private insurers shun those that they fear will get sick, or who have become sick. The ideal for a private insurer is to insure a low risk group who pay premiums but never incur any medical costs.

State health insurance is generally for poor people. Medi-Cal is the state program for California and is for sick people with dependents, elderly, kids and so on. These are high risk folks as regards medical expenses.

I propose that state health insurance compete headon with private insurance for the premiums paid by employers to insure their low risk employees - low risk because they are of working age and healthy enough to work. Doing so would

1: capture income to fund the state insurance programs, in the form of premiums that would otherwise be paid to private insurers.

2: lower the risk of the pool of insured.

3: The state, being not for profit, can make promises to extend coverage should a person lose his or her job.

4: The state can make the case that it will play fair and not screw the insured over to improve profit.

To kick this off, all state employees would be offered the choice of enrolling in the state plan. The state plan would need an image upgrade, which could be done by giving it a different name than the plan currently used by the poor folks, although really the adminstrative oversight etc would be the same.

Private insurers will scream bloody murder at subsidizing their competitor with tax dollars and there may be something to that.

bungston, Sep 12 2008

Medicare Australia http://en.wikipedia...edicare_(Australia)
seems to work so far [BunsenHoneydew, Sep 18 2008]


       There are a lot of us. But Canada is big.
bungston, Sep 12 2008

       Cut the ridiculous and arbitrary tie between health cover and the employer altogether?   

       /edit/ Sorry, that was a bit harsh. This is probably not a bad first step along the way. Current conditions probably only seem ridiculous to someone from a sane country.   

       I disagree about rebranding the state plan to keep it distinct from Smellycare though. Merge them, and all the other state, national and local government and quasi-government plans you mention.   

       Then merge with all the private providers - by fiat if necessary.   

       Oh wait, that would be a universal single health plan, wouldn't it? Naaah, never work. [link]
BunsenHoneydew, Sep 18 2008


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