Tuesday, August 18, 2009

If The Public Plan Is Stripped Out of Reform....

Then, for reasons Bob Herbert highlights, the side deal with the pharmaceutical industry should be flushed as well. And, also for reasons Herbert highlights, care needs to be exercised to ensure that people compelled to buy insurance are not only allowed to buy in without regard to pre-existing condition, but also at the group rate.

Herbert notes,
If the oldest and sickest are on Medicare, and the poorest are on Medicaid, and the young and the healthy are required to purchase private insurance without the option of a competing government-run plan — well, that’s reform the insurance companies can believe in.
More than that, it significantly raises the barrier to entry. Right now, at least in theory, a company that had a lot of money and a desire to enter the insurance business could do so - and could cherry-pick clients so as to protect its profits, just as the present group of for-profit insurers do. But post-reform, it would take a much larger investment, carrying much more risk, to start a new health insurance company.

Not that companies are leaping into the field, even under the status quo.

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