Health Care Politics

Health care insurance is too important to be left solely to the private sector.

   Insurance companies are locked in to bottom-line thinking, and must balance their accounting books every quarter -- even those carriers that are ostensibly nonprofit. Others must answer to shareholders and post positive earnings.
   Basic to private enterprise thinking is to maximize income and minimize expenses. When applied to insurance companies, this means to collect more in premiums (income) and pay out as little in claims (expenses) as possible.

   Basic to economic thinking, meanwhile, is that people respond to incentives -- that is, to make it worthwhile for them to do something, such as to sign up for health care insurance. To enact a negative incentive -- a penalty, for example, for not doing something -- too often causes a negative reaction. That is, people may resent being told they must do something, and thus they refuse to do something that they might otherwise do if there were positive reinforcement.
   In the current issue of universal health care, one major key to success of the program is to persuade young, healthy people to sign up. However, as it is now, the Affordable Care Act is for many folks a mandate to buy health care insurance on the commercial market. But the reaction often is, "I'm young and healthy, and not likely to get sick or seriously ill, so I don't need insurance, and I object to government telling me to buy something I don't need."

   So the program is a boon to private sector insurance companies, giving them a huge new  customer base of people who are told they must participate. Of course, they are not told which plan to buy, but supposedly they have a range of options, along with government assistance if they can't afford an appropriate insurance plan.
   To make things more complicated, the federal government assistance program flopped in its initial rollout.
   No wonder people are angry.

   A better plan would be to expand the Medicare and Medicaid programs to automatically enroll everyone, much as the Social Security program applies to everyone, with contributions deducted from paychecks.
   Such a plan would not necessarily bypass insurance companies in the private sector, since they could be enlisted to administer the program under contract with the government, much as private sector firms do so now with Medicare.

   In short, universal health care is too important to be left solely to the private sector. It works in other major developed countries. The major reason it's not working in America is political, coupled with incompetence in setting up the federal online marketplace -- effectively, this is little more than a government help program.
   Moreover, various states are making better progress in offering universal health care, beginning with Massachusetts, which set up its program before the federal government tried to expand the concept nationwide.
   Such a program stumbles mostly in regions where politicians fight over who gets credit for setting it up.