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Can Private Health Insurance Compete With The Government ?

By Da King Published: June 24, 2009

Here's President Obama during yesterday's press conference, talking about the public health insurance option he wants as part of health care reform:

OBAMA: As one of those options, for us to be able to say, here’s a public option that’s not profit-driven, that can keep down administrative costs, and that provides you good, quality care for a reasonable price as one of the options for you to choose, I think that makes sense.

QUESTION: Wouldn’t that drive private insurance out of business?

OBAMA: Why would it drive private insurance out of business? If -- if private -- if private insurers say that the marketplace provides the best quality health care; if they tell us that they’re offering a good deal, then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.

Now, the -- I think that there’s going to be some healthy debates in Congress about the shape that this takes. I think there can be some legitimate concerns on the part of private insurers that if any public plan is simply being subsidized by taxpayers endlessly that over time they can’t compete with the government just printing money, so there are going to be some I think legitimate debates to be had about how this private plan takes shape.

But just conceptually, the notion that all these insurance companies who say they’re giving consumers the best possible deal, if they can’t compete against a public plan as one option, with consumers making the decision what’s the best deal, that defies logic, which is why I think you’ve seen in the polling data overwhelming support for a public plan.

The President is being disingenuous, to say the least. He's a smart guy. He KNOWS there is no way private companies can compete directly with the federal government, on health insurance or anything else. The reasons are obvious, and ironically, the President even named some of those reasons in his press conference. I see Obama engaging in his 'up is down' version of reality again.

First of all, the government has a guaranteed source of income, the taxpayers. The government can just force the taxpayers to pay for anything of the government's choosing. Private industry cannot do that. The private sector depends upon consumer choice. It's voluntary. Advantage - government.

Second, the government doesn't have to turn a profit to survive. Private industry does. The government can run the most inefficient, bloated, and even corrupt program imaginable, and the taxpayers must still subsidize it. On health care, the government can charge, say, $200 per month for public health insurance, and it doesn't matter, because the taxpayers can be forced to subsidize the rest in any variety of ways. Private health insurers can only charge a monthly fee that will allow them to survive. Currently, that amount is around $400 per month. Advantage - government.

Third, the government sets the rules of the game. It can legislate one set of rules for itself, and another set of rules for the private sector. That tilts the playing field so heavily in the government's favor that it's laughable to say any private company could compete with that. If Walmart could set the rules of retailing, how long do you think K-Mart would be able to compete ? Not very long, because Walmart would set all the rules to favor Walmart. Advantage - government.

Fourth, once the government undercuts the private health insurance market, the floodgates will open. Citizens and employers would flock to the public option, not only because it's cheaper, but also because the public is ALREADY PAYING FOR THE PUBLIC OPTION (so it would be illogical not to use it), and because all employers would be REQUIRED to provide health insurance for their employees or be fined. If the public option is cheaper, they will go to the public option. It's obvious. Advantage - government.

The President is using the public option as a Trojan Horse to implement government run health care even as he denies doing it. That's obvious too. I don't mind having the debate between public and private health insurance, because our current health care system is not sustainable over the long term. I'm open to any and all ideas, but I don't care for all the deception. I don't like the President treating the American public like they're a bunch of dummies.

I also don't like the idea of using government force to mandate health care coverage. Obama used to rail against forced insurance too, but that was BEFORE he bacame President. That was back when he was only making those disposable campaign promises that got him elected.

Be sure to stay tuned tonight for Obama's hour long health care infomercial on ABC, where no Republicans will be allowed. I'm sure the prez will appeal for bipartisan support, even as the GOP is barred. Do we still call that CHANGE ?

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