Apparently Andrew Sullivan is leaning towards
support of a (limited) public insurance option, and as Andrew goes, so goes the nation. Historically, anyway. He says:
...on the public option, I'm still behind. I don't want to see a stealth government take-over of private health insurance, but I can see the case for a limited public option. Clear restrictions on the buying power of such a program would ease my concern. But if a public option can streamline overhead, pioneer less bureaucracy, and keep the private sector on its toes - as public universities can private ones - I'm not opposed. Why would anyone be? The key is reining in its unfair advantages while encouraging its fair ones.
So Andrew seems to believe that there is some good reason to keep private insurers around, even when a public option exists.
This makes me wonder: what is the virtue
of private insurance? I'm really curious about this, and ten minutes of Googling didn't turn up any compelling answers; so maybe some of you smart people can enlighten me. What, exactly, do private health insurance providers contribute to our society? Obviously they employ a lot of people, but that does not strike me as enough of a reason for their continued existence, if their other effects are generally negative. Those people could be more usefully employed doing other things, like, I dunno, hyperinflating the values of some overcomplicated security instruments that no one else understands. It seems obvious that a corporation whose financial interest lies in pleasing its stockholders by maximizing profitability is not going to act in the best interests of its customers, if it can get away with not doing so.
And let's face it: insurance companies can get away with it. With a durable product, like a car or a computer, you generally get a warranty, and if it doesn't work as you expect, you can return it; or at the very least, refuse to purchase that product again and thus punish the supplier economically. But with health insurance, it's different. By the time you find out it's broken (that is, you need coverage that your insurance isn't going to come through with), it's already too late for you to shop around
. You're now damaged goods, a pre-existing condition. Not to put too fine a point on it: you're screwed. So the usual economic incentives and constraints seem not to apply.
If a single-payer system can cover everyone and allow medical professionals and suppliers to make a decent living, why would we want
to perpetuate the private health insurance system?