I think the point of Obamacare is to destroy the private health insurance system. But Obama/Pelosi/Reid aren’t sufficiently candid to openly propose the idea because that would allow a real and legitimate democratic debate about how we should manage the medical future. (Similarly, the pretend they don’t want rationing, when it is clear that they do.)
The Colorado health insurers are warning of a collapse of the private system if current plans pass into law. From the story:
Colorado insurance executives, cautious supporters of health care reform throughout the past year, are now warning that current proposals could cause a “system collapse.” At issue are what insurance companies consider absurdly low penalties for people who choose not to buy health insurance. Their concern: People will buy insurance only when they desperately need it, such as after they’re diagnosed with cancer or heart disease. Healthy people might choose to pay the penalty, now proposed at a few hundred dollars per year, because it is far less expensive than buying insurance.
Insurance companies, under that scenario, would end up spending more to treat patients than they would receive in premiums. Rates would rise even faster than they do now.
That seems irrefutable to me. You can moan about those greedy insurers all you want, but I don’t think you can argue with the logic. Insurance spreads risk. The best way to do that is to allow the potential insurance pool to be as big and diverse as possible. That is why a big employer or union can get good rates even for people with preexisting conditions.
The best way to spread risk would be to permit interstate competition among insurers. Add to that, the idea of private insurance exchanges of the kind proposed by Senator Wyden (D-OR), and you could really put a dent in the problem of the uninsured and ensure that people with preexisting conditions are covered.
But the Dems refuse, which makes no sense if all you want to do is lower costs and increase coverage. But it makes perfect sense if you really want to destroy the private system without having your fingerprints on the detonator. And so they constrain competition and risk spreading, while forcing insurance companies to take all comers, as they also stifle the ability of companies to innovate with low cost catastrophic policies,etc. It is not only bad policy that will implode what works for the vast majority today, it is mendacious and disrespectful of the democratic process because we are denied a true and substantive debate.