Sometimes when men like Barack Obama are in control of the conversation, with the full-throated endrsement of the old-school media in tow, simple truths get missed.
Today in my home state, the president continued his nationwide tour touting his support for the Stalinization of the health care industry. In his prepared remarks, he said:
At the same time, if you like your health care plan, you can keep your health plan. If you like your doctor, you can keep seeing your doctor. I don’t want government bureaucrats meddling in your health care – but the point is, I don’t want insurance company bureaucrats meddling in your health care either.
So now the president is trying to save us from the “insurance company bureaucrats”? Um, Mr. President, I know you’re the savior of the world and our Nation’s salvation and all, but why don’t you just butt the hell out of the private business relationships we, as free citizens of the United States, have chosen to develop between ourselves.
And to in the same breath suggest that his plan would also keep the “government bureaucrats” out of our business is a complete fantasy. Know this: the president’s “public option” will mean a sure death to private health insurance in America. And here’s why:
Let’s start with recognizing that the president’s purpose for offering the “public option” is to bring about “competition” that he feels doesn’t sufficiently exist right now. So we can presume he’s not going to offer in this “public option” fewer services at a higher cost. Even someone as obviously unacquainted with the rules of economics as Barack Obama would realize that dynamic wouldn’t create any competition.
So the “public option” from the start would be trying to undercut existing insurance policies. How much so? Let’s try a thought exercise:
Say you work in a service industry. It could be any industry. You own a movie theater; you own an oil-change shop; you own a barbershop; you own an airline. You provide “widgeting”. Whatever. Now imagine a new entrant into your market.
– Your new competitor had zero start-up costs. No cajoling angel investors, no groveling at VC events. No presentations, no investors at all, in fact. No soft opening, no advertising because everybody already knows him. No marketing budget either.
– Your new competitor has a basically unending source of capital. He can literally print money, and also can borrow 100% of his costs and expenses if he has to.
– Your new competitor is exempt from all the regulations you and everybody else in your industry have to follow. In fact, your new competitor can write new regulations that you all are obliged to follow by law (but not him).
– Your new competitor needn’t negotiate with his (and your!) suppliers because he has the authority (by law) to dictate the prices they charge him for their goods and services. Naturally, your new competitor will force these suppliers to lower their costs for him and these suppliers will in turn raise your and everybody else’s costs to compensate. I say “naturally” because your new competitor has a history of this in other industries in which he’s involved.
– Your new competitor can force people who don’t currently avail themselves of your services to do so, ensuring that everybody in the entire Nation will be looking for SOME form of the service you (and he now) provide.
– Most importantly: Your new competitor NEEDN’T TURN A PROFIT!
The bottom line of all this is going to be that your new competitor will be able to offer the services you and your current contemporaries are offering ostensibly FOR FREE, from the perspective of your customers. Simultaneously, your new competitor’s actions will increase the cost for you to do business yourself.
How long do you suppose you (or anybody else) would be able to sustain your business in this atmosphere?
This is what the health insurance industry is facing. Without judgment or bias, this is a fair scenario. I’ll leave it to those reading to decide if it’s good or bad. But without question, this is what would happen: THE END OF PRIVATE INSURACE, for good or bad.
The punch-line here? With no more private insurance, the only mechanism for managing our health care left will be that great “public option” that he president promises us won’t lead to the “government bureaucrats” “meddling” in our affairs. All who believe that, please raise your hands.
-Nick (ColoradoPatriot, from HQ)