Simple Math

As health care compromise legislation continues to take shape, it is becoming increasingly clear that the “public option” of government-subsidized, federally provided health insurance is unlikely to pass.

There is a reason for this. An estimated 45.7 million Americans, or 15% of the population, do not have health insurance. The other 85% do, and a lot of them are happy with what they have and don’t want to see it changed.

America is a democracy, and therefore those who champion the cause of the 15% minority will usually face a lot of resistance from the 85% majority. Especially when the cause of the 15% minority has the potential to wreck so much that belongs to the 85% majority, for example having their health care plan out-competed by government-subsidized insurance. Hence, the majority will fight to stop it, and the majority will most likely win.

The majority is not always right. But the majority is always the majority.

26 thoughts on “Simple Math

  1. You're eliding quite a lot here — there has been consistent and broad public support for a government-administered insurance plan, at the same time that most of the same people say they're satisfied with their current insurance. This isn't surprising, is it? It makes sense that most people would be happy with their insurance situation… until they actually need it and they're denied coverage.

    NYT poll in mid June:

    "While 85 percent of respondents said the health care system needed to be fundamentally changed or completely rebuilt, 77 percent said they were very or somewhat satisfied with the quality of their own care… The national telephone survey, which was conducted from June 12 to 16, found that 72 percent of those questioned supported a government-administered insurance plan — something like Medicare for those under 65 — that would compete for customers with private insurers. Twenty percent said they were opposed…. the proposal received broad bipartisan backing, with half of those who call themselves Republicans saying they would support a public plan, along with nearly three-fourths of independents and almost nine in 10 Democrats."

  2. Luckily for those 15% the politicians and health professionals are not concerned so much that the 85% are happy, (And a lot of them Aren't because you can be Insured, but still be UNDERinsured). Why do you think they began to construct some sort of "solution" if they didn't view these 45 million as a problem? (America's health expenditures continue to increase if only for the amount of uninsured using Emergency Departments). Their healthcare plan wouldn't be "wrecked" if those who were happy with their current coverage and providers were allowed to keep them- as Obama's plan states.
    but we shall see…
    Yeah the "public option" bit isn't likely to pass because our system is wayy more broken and complicated than that solution will allow. We're going to need something much more comprehensive and detail-oriented to specific states and localities.
    If the majority always won there wouldn't have been a lot of change in this country Christophe.

    1. Being allowed to keep your old health plan doesn't do you a lot of good if it now costs 3x as much and covers less because the insurance company can't compete with subsidized insurance.

      "If the majority always won there wouldn't have been a lot of change in this country Christophe."

      Change usually occurs when the majority wants it to happen.

      1. wow. how off.
        change occurs when activists, usually in the Minority, protest and lobby and fight for change. If we left it to the majority, things would stay the same because people as a whole Don't Like Change.

      2. And whats wrong with a little competition? Health Insurance companies can't keep monopolizing on our health the way they have been.
        Car insurance companies compete for our business, why not health insurance?

      3. Health insurance companies DO compete for our business. The same way that car insurance companies do.

        The real problem with health care is that it costs too much. There is nothing in Obama's plan that will address this problem, or even admit that this is the real problem.

      4. Right; the problem is that it costs too much for delivery of care; specifically, costs are rising faster than inflation when they don't need to be rising quite so fast.

        The fact that we spend, as a society, so much on health care is not a problem. Nobody whines that 20% of our GDP is made up of manufacturing, for example. The likes of Tom Daschle have actually suggested that we cut out innovation and 'freeze' health technology at current levels in order to reduce the healthcare component of GDP.

      5. true, however you've only addressed it from the public option perspective.

        "Being allowed to keep your old health plan doesn't do you a lot of good if it now costs 3x as much and covers less because the insurance company can't compete with subsidized insurance."

        the concept of competition is inherent in Chris' argument
        Excuse me if i seemed vague. but there is competition, even with the addition of a public option. Those ABLE to pay for policies that provider higher quality (and more inclusive) coverage than what the public option offers will stay or opt for those more expensive insurance plans, because they WANT to (even while they are paying subsidies for the public option).
        so whether the private insurance companies like it or not, they will have to reckon with the public option by competing with it and striving to, at the minimum, maintain this payer base.
        (Maybe i'm just operating under the assumption that the "public option", if any version of it goes through, will suck compared to what private insurance companies are now offering- which on the whole suck too but there are some great plans- think Kaiser Permanente)

      6. The government-run option will be able to compete with private insurers in the same way that corn ethanol competes with gasoline (the latter is more environmentally friendly and efficient to produce). Government subsidizes the "public option" and gives it all kinds of speical regulatory treatment, while imposing crushing costs on insurers.

        The "public option" will not feel competitive pressure from private insurers. It will be lower-cost to consumers, but higher-cost for society, and will, because of its special regulatory and subsidy status, be able to provide lower quality of care and not get competitivelly punished for it.

      7. i still don't understand how private insurers won't be forced to compete with the "public option" in order to maintain their insured base. How do we know everyone won't flee all the private insurance companies and latch on to the public option? Surely there must be a way for insurance companies to retain their policy holders? Lest many more people lose their jobs…

        personally, i hope obama's talk tomorrow night gives us more hope for co-ops

      8. Private insurance companies need to earn a profit (or at the very least break even) if they are to remain in the market. A government option (co-op or otherwise) does not need to do that. The federal government is unique in that it can print its own money or simply raise your taxes. So, if the government option is not profitable, they merely have to send over to the Treasury to pay the bills. A private insurance company doesn't have that ability. So, if they run out of money, they go out of business. Any government option is intrinsically anti-competitive. They merely have to sell below the market price to drive their "competitors" out of the market at which point they become a monopoly. Businesses that need to make profits to survive cannot compete with institutions that don't need profits to survive.

      9. What I love about the majority of your claims here is that they rest on failed premises.

        1) "It would be subsidized by tax payers." Wrong. Obama has said (and we'll take him for his word) that after a start-up cost, the public option would be self-sustaining.

        2) "Since the public option would have 300 million paying 'customers'" — Wrong. Look at 1) and no, the CBO has said that there wouldn't be a large rush to the public option.

        You can't make an argument if your premises are already untrue.

        You really think that if people could buy simply buy insurance across state lines that it would magically lead to lower costs? HA! It's not like "opening the borders" to "competition" would somehow break up the few insurance giants that control the overwhelming majority of health insurance plans.

      10. I recommend that you look to the CBO for your information on subsidies, too. Besides the initial $2 billion loan, tax credits etc, the plan is going to require billions in payments from the Treasury:

        http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200….

        Actually, competition does reduce prices. People can choose lower-priced plans, so prices go lower. That's a basic principal of economics that all reasonable economists accept.

      11. I think you're confusing subsidies for those who cannot afford health care with subsidizing the system as a whole. The latter will not occur. Check that document over again.

        Duh, competition reduces prices. That wasn't my point. My point was that the health insurance industry is plagued with a few giant companies. Simply opening the state borders doesn't mean that that small influx of competition is going to reduce prices significantly. It is really make-believe competition. Further, allowing the purchase of health insurance across state lines would subject consumers to added risks: there are inherent consumer protections by only allowing health insurance purchases within a state. Different states regulate health insurance in different ways; opening state lines would be paramount to weakening or erasing these regulations. People are already getting screwed; deregulating the industry isn't the answer.

        Plus, why would I want access to another state's crappy insurance when my options are already crappy? šŸ˜€

  3. Chris, I have a serious problem with the number 45.7 million. It is much much lower than that if you take out illegal immigrants, young people who choose not to have it, and people who make over $30,000 a year and chooose not to have it.

    1. Yes, but the government viewpoint is that EVERYONE must have health insurance.
      Kinda like that article you wrote about Universal UNC Health Insurance. šŸ™‚ remember?

      1. It is not immaterial. If it is less than 15%, there is a greater majority. That makes your argument stronger.

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