re: #389 wozzablog

Health insurance companys make - in the face of the industry they are in - obscene profits. Year after recent year of increased profits, massive salarys at the top and large stock dividends - while my friend only has COBRA.

I am really certain the Media was full of Insurance company CEO’s bleating about being painted into the corners of being regional monopolies - after all - no company wants to be in a position where they have 70% + of a whole regions business at the expense of a fraction of a national percentile.

If Insurance firms had lobbied for reforms half as hard as they have lobbied against the current proosals i could believe they hate the current system. In the face of their large profits based on ever higher premiums and ever more people ejected from rolls due to “pre-existing conditions” and with the life span gap between those with comprehensive insurance and no insurance widening alarmingly. the current system does not work - a system enabling comprehensive cover to all will raise the levels of national and underlying health.

I will pass my friend your good wishes.

They make something like 2.1% return on capital, which is quite low compared with other fields, and hardly qualifies as obscene, unless you’re saying that because they’re in health care they should deploy their capital for no return at all. Whatever you think about high salaries, dividends, etc. the figure is in comparison to other businesses using the same metrics - like saying that unemployment is really X% - but if so then the same differential would obtain in other comparisons to unemployment at other times and places.

You may consider all profits to be obscene, but that’s a different issue!

Insurance companies have been lobbying for years to be free to compete out-of-state, which would save tons of people money, as well as to be able to offer more kinds of policies, instead of having to conform to government regulations. To say nothing of having caps on tort for pain/suffering. In Texas, pretty much all the ob-gyns closed up shop a few years ago, thus rousing the somnolent legislature into action. They capped these suits, malpractice premiums tanked, and doctors have been flocking back ever since.

I lived in NYC when the AIDS lobby got the state to allow people to sign up without regard to existing conditions and to make all policies contain lots of new coverages, and my premiums tripled in a year or so. Over 1.5M people have left NY state in the past 8 years, primarily due to taxation, but also because of things like the cost of health insurance under these conditions. The average policy there is $12K as opposed to $5K most everywhere else.

The problem with the Public Option in the current bills is that the govt will be free on the federal level to impose the same kinds of regs as they have in NY. So “you can keep your current policy if you like it” except that it will probably cost triple, if it’s still legal at all. Thus a colossal number of people will take govt insurance, which is of course the goal - the implementation of single payer, a la the UK.

And as the lady says, Americans aint’ gonna like that at all, once they get a taste of it. We’re used to flying first class when it comes to health care, and I definitely agree that when the govt is paying, that won’t work. But if we can really save as much as Obama says, we could maybe salvage the existing system, which crashes and burns in a very few years. And by liberating the insurance for the rest of us from tax distortions (some deductible, some not, some tax-free), tort distortions, and most other market distortions, so that the whole system wouldn’t look like a Max Escher pretzel, as it currently does, I think there might be a very nice outcome.

Consider how well free markets like computers work, as opposed to hospital equipment markets, where if they mimicked computers you’d be getting an MRI at Wal-Mart for $4 at this point!