Save Us From "Government-Run" Health Care!

You can't blame the health insurance companies if they fight the health care "public option" as if their corporate lives depended on it.

Their lives do depend on it, and they know it.

Health Care Service Corporation, the parent company of several Blue Cross/Blue Shield health insurers, is honest about it:

"It is estimated by the Lewin Group that a government-run health plan based on Medicare payment rates to physicians and hospitals would be offered with premiums 30-40 percent lower than private insurance. This would drive more than 100 million people into the public plan in the first year. In a very short timeframe, this mass migration would result in a collapse of many aspects of private health insurance and our current health care system. If a government-run health plan were initially required to offer negotiated payment rates to health care providers, it is widely believed that over time those rates would be ratcheted down and set by government, resulting in the same scenario described above."

That doesn't require much translation. A public option would offer such dramatic premium savings that private health insurers wouldn't be able to compete, and they'd soon go the way of the dinosaur.

Government-sponsored competition doesn't always eliminate private players. The existence of public housing doesn't drive the private housing market out of existence. Public universities didn't make Harvard go away. If the private sector is offering something better, it won't be eliminated by the creation of a cut-rate version funded by tax dollars.

But the private sector can't really do health insurance better, can it? If a corporation collects $1000 in premiums, it can only build snazzy headquarters, pay employees, and give dividends to shareholders by paying out less than $1000 for medical expense reimbursement. A for-profit corporation can only do what a corporation is supposed to do -- improve its bottom line -- by funding less health care, which is exactly the opposite of what society is clamoring for. Sure, a private insurer can try harder to encourage its customers to be healthier. It can try to recruit more young customers who don't need much care. But it will eventually need to try to turn away and dump the bad financial risks: the folks who will need more health care than they can pay for. When it's that clear that private industry needs to do the opposite of what society needs it to do, it's time for society to take up the job.

That doesn't mean that the the insurers' concerns are irrelevant. The current administration decided to throw billions of dollars of life preserver at General Motors only after calculating that letting the company lie in the bed it made would result in a meltdown that would cost more to clean up than to prevent. It may well be that too many lives are wrapped up in the insurers to let us obsolete them. That's a fair topic for discussion.

But that's a different discussion than the one we're currently having. It's high time that we entertain the insurers' true position -- that they desperately need the government to protect them -- instead of the one they're trying to push -- that the public option would inflict un-American terror on the nation.