Obama’s health care reform: road to single-payer serfdom?
November 19th, 2008 | by Brian Schwartz |Will Obama’s proposal for a nation-wide mandate for guaranteed issue insurance decimate insurance companies to the point that government will have to “save the day” with a single-payer monopoly that Obama really wants? Consider this from the Associated Press:
Barack Obama’s campaign promise should prove irresistible to the millions of uninsured: guaranteed access to affordable health coverage, regardless of illness or condition. …
No participating company could turn someone away because he had cancer, heart disease or diabetes. Nor would someone have to pay a higher monthly premium based on those conditions.
The coverage guarantee is not a new concept. But it has had a troubled history in several states that tried it for people seeking coverage through the insurance market. Some states, such as Kentucky and South Dakota, eventually dropped the guarantee after insurers left. In the few states where guaranteed coverage continues, monthly premiums generally are much higher for younger, healthier people than in nearby states. …
South Dakota enacted the guarantee mandate in 1995. By 2001, claims exceeded the premiums collected by $2 million. By 2003, the state was down to only three major insurers; one, American Family Insurance Group, notified state officials that it was about to leave, too. …
A similar situation occurred in Kentucky, which adopted the guarantee mandate in 1994 and put limits on premium rates.
“Kentucky became a national leader, but an unforeseen consequence was the state also became an island where more than 60 health insurance companies abandoned this market for other states due to income, market size, or regulatory and legislative climate,” the state’s insurance commissioner wrote in 1999.
I’ve noted before that guaranteed issue backfires. I guess if Obama implements guaranteed issue nation-wide, the insurance companies will have nowhere to go. Hmm, what a fine opportunity to “start from scratch” with the monopolistic single-payer system Obama wants? As Paul Krugman has commented on Obama’s proposal:
government-run plans so people can opt out of private insurance. Many people think such a federal health insurance system would eventually merge with Medicare and Medicaid to form a larger national system.
Gee, how about respecting people’s right to opt out of paying for government programs that compete with and crowd out charities and insurance companies?
tags: crowd out, guaranteed issue, Krugman, Obama Care
