Nationalized Insurance

[muon2]

Let's say my house burns down. Government could cover me, but if it did, I wouldn't buy insurance.

That said, I think what you posted makes sense. My only protest would be if it was implemented on a federal level rather than state.

Actually local governments cover a substantial part of your home insurance rates. Every area has a what's called an ISO rating that basically tell insurance companies how well the community fights fires. The rating has many factors such as paid vs. volunteer firefighters, distance to the station, water pressure and water supply, and type of equipment. The better your local government meets these tests, the lower your home insurance rates.

I like the idea for universal catastrophic coverage as a means for controlling malpractice costs. It also would help save business a lot of money in labor costs associated with their health care packages. Though I also agree that a state or regional implemenation is best, there should be national standards for portability when people move.

[muon2]

What do you mean "portability?"

The current insurance system is based on the assumption that nobody moves or changes jobs. If you do change insurance carriers, you can be denied coverage for pre-existing medical conditions. That is if you develop a chronic illness while working for one employer, you may not be able to move or change jobs unless you also give up your insurance.

A porability requirement would guarantee that if you were covered by some plan and then develop a condition requiring major medical expenses, a new insurer cannot deny you at least the same level of coverage that existed under your previous insurance plan. With private insurers this is difficult to handle, due to unfair sharing of risk if there was such a mandate for portability. With state payers, the sharing of risk can be established as part of a federal portability requirement.

[muon2]

I think we should have a general "catastrophic loss" public insurance system.  Such a system would go a long way toward what Republicans call "tort reform".  In many cases of medical malpractice, for instance, plaintiffs deserve recovery, but the burden should not fall on individual doctors or even the medical profession in general.  Such insurance would allow people who suffer losses through no fault of their own to recover without burdening a particular sector of the economy disproportionately.

Why does it have to be public? Who pays the premiums the owner or the taxpayer?

In the insurance business there is a term called "moral hazard" which means that by insuring against some event you increase the risk that it will happen. An example would be building a home in a location where it is known that floods are likely. An insurance company would charge you a very high premium or refuse to insure such a house at all, so the owner would probably conclude that it was not practical to build a home there. But if the government  guarantees insurance on the home then the owner will build it knowing that if it does get destroyed by a flood the government will pay for it. So that type of insurance promotes risky behavior.

If the insurance is granted without looking at risk you would be correct, and the government would be ill-advised to support that behavior. On the other hand, your example is another one where government already has a hand in setting the rates. The risk-assessment for flooding is based on flood projection maps made and paid for by the government.

In a neighborhood near me this summer there was a great amount of concern when the county released new flood calculations for that area. The back yards of some properties would now be in a potential flood plain, and at risk should they be built upon. The property owners felt that government was potentially raising their isurance rates. The county was only reporting the factual conditions of the property which had not been acurately modeled in 15 years. It seems to me that it was the insurance companies who relied upon taxpayer dollars to determine risk and set rates accordingly.

[muon2]

It gets back to my earlier question; who is paying the premiums? Usually government sticks the taxpayer with the cost. If thats what you have in mind then the moral hazard exists. The homeowner would not be discouraged from building the house in a high risk area. On the other hand if the homeowner pays the premiums that may eliminate the moral hazard but then why get the government involved? Leave it in the private sector and let the insurance companies do it.

I am suggesting that currently the cost of premiums are shared by public and private bodies for fire and flood insurance. Through tax dollars, governments determine risk factors that directly affect the premium paid by the homeowner. Studies of flood plains, flood control projects, and fire prevention measures all have diret bearing on the premium. When goverment pays for these, government is indirectly paying part of my premium by lowering my risk to the insurer.

To tie this into health coverage, one risk that is not well managed by the existing system is the problem of pre-existing conditions that may require major madical expenses. Government can act to manage that risk so that people who relocate are on an equal footing with those who spend a lifetime at one place. I believe that a this would have a benficial impact on business and the economy by making it easier for labor to move where needed within the country.

[muon2]

I gotta go with private but I wouldn't recommend anything major at first beyond tax cuts for medical expenses, Medical Savings Accounts and a little deregulation of the insurance industry (the really stupid laws first).  This is a hard thing to flip over to private because it's such a big program and so key to the average American's life.  I think eventually we can show the success of the free market in health care to all but the most ignorant Democratic partisans, but it would take some time.

I used to think that was possible, but as I watch public expectations I now realize that health care will be as impossible to fully privatize as it would be to privatize all the local roads and police departments.

There has been a sea change in the past 50 years in this country and it has now caught up to us. The change is in the work place and it shows up in two ways. The first is that businesses started giving out health benefits to employees and their families on a regular basis. Perception of health care 50 years ago was that it was just that, a benefit. But now the public views health care as a necessity. You can argue that it is possible to put the genie back in the bottle, but I see no way that society will return to a level of expectations that existed before I was born (I'm 46).

The second problem that causes much of the failure in the private delivery of health care insurance are related to the changing nature of the workforce. When health care was a benefit, families were dominated by single wage earners who often spent most if not their entire career with one firm. That allowed insurance companies to control their risk because they knew who they were dealing with - and for how long. Over the last 25 years this model of employment has completely changed. Single wage earning household are the minority, and the 80's began a tradition of moving up by switching firms.

The existing system of competing private insurers can no longer serve this nation. Individuals who do not fit the original model are not served, nor does the private sector want them - too much risk. The current system also costs our businesses too much, and reduces their competitiveness worldwide. A new model using state and local resources can free up business capital and provide the services that the private sector no longer will undertake.