Tuesday, June 30, 2009

Bottom Line on Public Option

This won't come as the slightest surprise to those versed in health care policy issues. But I fear it's only barely permeated the health care reform debate in the country, certainly in Washington. And that's this: the opposition to a so-called 'public option' comes almost entirely from insurance companies who have developed monopolies or near monopolies in particular geographic areas. And they don't want competition.

Note, I'm not saying more competition. I'm saying any competition at all. As Zack Roth explains in this new piece 94% of the health care insurance market is now under monopoly or near-monopoly conditions -- the official term of art is 'highly concentrated'. In other words, there's no mystery why insurance costs keep going up even as the suck quotient rises precipitously. Because in most areas there's little or no actual competition.

It's something everyone can understand that if you have only one widget maker, widgets will get really expensive, and probably decline in quality. And the widget makers will pour lots of money into Congress or whatever the law-making power is, to keep their monopoly in place because their monopoly ensures locked in profits. It's market theory 101 (or perhaps, rent-seeking 102, depending on your perspective.)

That's basically what this is all about. Read the piece, it will open your eyes (if they're not already) and make clear why the opposition to a public option is about preventing competition.

http://www.talkingpointsmemo.com/archives/2009/06/bottom_line_on_public_option.php?ref=fpblg

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