By Tom Quiner
In a free marketplace, here is how insurance works:
• There are lots of licensed agents selling different types of coverage depending on your needs.
• These sales agents receive a commission on the policies they sell.
• They help clients sort out the multitude of choices they face so they can purchase a product tailored to their needs.
• Some companies set up “exchanges” that make it easy for prospective policy purchasers to “kick tires” and compare prices.
• Insurance companies aggressively advertise on television and other forms of media to gain more market share and educate consumers.
• Customers only purchase the coverage they need and can afford.
• Insurance premiums remain stable.
• Taxpayers are not involved.
• Insurance companies market their products across state lines.
I have just described the auto insurance industry.
Lots of licensed agents sell it. The airwaves feature ads for a bunch of competing companies on a nightly basis. Two companies, Geico and Progressive, have set up their own online “exchanges,” without any taxpayer subsidy, to easily allow prospective customers shop price with their competitors.
Customers only buy the coverage they need and can afford.
Talk about incentive to hold down prices!
Auto insurance companies market across state lines. Thanks to this old-fashioned system, known as capitalism, insurance premiums have remained stable over the years.
Health insurance operates in a government-induced restricted market.
Consumers cannot buy products across state lines. As a result, virtual monopolies exist in most states with a dominant company holding 80 percent of the market share, or more.
You never see health insurance companies advertise on television.
Consumers are not allowed to buy the coverage they need and afford. Legislators at the state and national level in their mock benevolence impose “mandates” on health insurance which incessantly drives up premiums.
The government pretty much lets people buy the coverage they need and can afford when it comes to auto insurance. But for some reason, they stuck their nose into health insurance and politicized it.
All of their tinkering made health insurance become overpriced. Their solution? Obamacare.
Now, more than ever, we have to abide by what government thinks is best. Mandates have been ratcheted up to such a point that the IRS says that a “Bronze Plan,” the cheapest allowable coverage allowed by the government, will cost an average family of five $20,000.
Instead of relying on the marketplace to set up an “exchange,” the government is creating the boondoggle, which won’t be ready in time to meet Congress’ deadline.
Liberals who set up the plan seem to think the way to save money is to get agents out of the way, so they’re paying outside groups to sign up people on the new exchanges, as reported in this morning’s Des Moines Register:
“President Barack Obama’s administration is awarding grants to three Iowa organizations to help people sign up for insurance under the new health care law. The government announced Thursday that just under $600,000 will be given to Iowa. The grants are going to Genesis Health System, Visiting Nurses of Iowa and Planned Parenthood of the Heartland. The organizations will provide outreach services around the state. In all, the federal government is giving $67 million in grants to 105 organizations in states that are letting the federal government run their online insurance marketplaces.”
Note who’s getting a payoff here: Planned Parenthood, a financial supporter of the president’s campaign, a group that is also profiting from a president-imposed mandate, the HHS Mandate, which compels all insurance coverage to include abortifacients and contraception in your coverage, whether you want it or not. (Guess who sells contraception and abortifacients?)
What a repulsive, political boondoggle.
Quiner’s Diner does not suggest that government doesn’t have a regulatory interest in the insurance industry. It does.
However, it is crystal clear that government overreach at every level of government has precipitated the dramatic increase in healthcare and health insurance prices in recent decades.
We should throw Obamacare out and start over by empowering the marketplace, not restricting it.