According to the USA Today, president Obama said the government-run & tax-subsidized “public health insurance option” would “keep insurance companies honest.” He’s not talking about fraud and current laws against it. The idea here, I suppose, is that competition would keep insurance companies honest, as people could opt for the “public” insurance plan if they are not. This, after all, is what competition is all about. But this is unfair competition, where the other team is also the umpire and government body of the league.
If Barack Obama wants an insurance plan to compete with commercial insurers, he should put his money where is mouth is: find some entrepreneurs who want to offer an insurance plan to his liking, modeled on how his “public plan” would work — except for one thing: it must comply with the same government-imposed rules and regulations as commercial insurers. No tax funding, special treatment, access to funds from the treasury, etc.
If politicians want insurance companies to be more accountable to consumers, how about lifting the tax exemption for employer-provided insurance. This would result in more people buying insurance directly from insurers, and make it easier to change providers if they are not happy with their current insurance company. After all, imagine how unaccountable your cell phone provider would be if you got your cell phone service through your employer?
