The market is generally unregulated in the economic sense. Insurers and providers are free to compete on the open market.

Hamandcheese wrote:

Good post, but there is something contradictory about the above sentence. In the "economic sense" markets are regulated even without formal regulation through competition. One of the biggest problems with American health care is that they actually aren't free to compete on the open market (though you could argue that that's the way they like it). As you go on to say, the markets are fairly regional, and though there are quite a few insurance providers nation wide, locally there is usually only one or two. In other words, there is no competition. The point of the public option is to wake the currently stalled system out of its coma by reintroducing price competition. For too long American health insurers have been competing through advertisement and customer selection (ie. pre-existing condition rejections).

It sparked an economic "race to the bottom" where other insurers had to start doing the same thing to keep up, but collectively it was self defeating. Everybody is stuck in a muck, but its impossible for it to fix itself because for it to be effective, all the companies would have to change their business models at once with no one trying to free ride. In its essence the health care crisis in America is a prisoners dilemma. To solve it you need a binding authority to lift all the companies out of the muck at once. A single payer system is that authority.

The public option has its merits too. I think it could actually work, by forcing companies to compete on price. If it doesn't work because the companies are too bureaucratic to reform themselves quickly enough before tanking then hopefully it will beckon the acceptance of a single payer system.

unrealist42 wrote:
The current US health care mess has its beginnings in the depression of the 1930s. A hospital in Houston, seeking increased revenues due to a lack of paying customers due to the economic crises, offered to provide 21 days of care to a group of teachers in Houston for a subscription fee of $6 per year. This proved exceptionally successful since the teachers were generally healthy and had little need of health care so the fees easily covered what services the teacher group needed and provided the hospital with much needed revenue. Other hospitals took up the practice and the scheme spread rapidly and became Blue Cross. By 1940 it covered some 34% of working Americans. Costs were low, workers did not generally need a lot of health care.

In 1942 an IRS ruling declared that health benefits were not taxable. By 1952 this was explicitly written into the tax law by Congress.

During WW2 when wages were restricted unregulated health benefits were expanded to attract workers and this continued in the post war era until by 1956 some %78 of American workers and their families were covered by tax free employer provided health care insurance provided by a myriad of non-profit and for-profit insurance companies with Blue Cross and Blue Shield as the standard bearers of care.

Health care insurance was about insuring healthy people.

In the 1960s Medicare came about to provide medical services to the elderly and disabled and was followed by Medicaid to provide similar services for the poverty stricken and unemployed.

By 1980 the only people without health insurance were mostly small business employees whose employer did not provide insurance, less than 5% of the population.

During the 1980s and 90s big changes were wrought in the entire health care scheme in the US. The previously landscape of non-profit providers was replaced by large for-profit corporations holding conglomerations of for-profit hospitals that dominated many areas of the country. How did this happen? It was a sellout by non-profit Hospital's boards of directors, many of whom personally reaped large gains and revenue strapped municipalities and tax laws that allowed the for-profit corporation to gain enough from the accumulated tax breaks of the non-profits to basically acquire them at little to no tax cost to themselves. Insurance companies instituted HMO plans which further squeezed revenues.

By 2000 the landscape of US health care was substantially different from that of 1980. Giant for profit health care providers became dominant in many regions of the country and prices for health insurance began their rapid rise because insurers lost their ability to negotiate prices and control costs. There was no where for them to send their subscribers if negotiations failed so these provider groups ratcheted prices up. HMOs were dead.

But, there was a catch, they needed the volume that Medicare provided to pay for their expansion so they needed to treat the indigent also, no problem, shift the costs to the private insurers. They also needed to pay back the $Billions they borrowed to finance these expansions, buying many hospitals which needed huge repairs and had never made money before, no problem, shift the cost to the private insurers.

Some of these huge corporations like Humana have been having financial trouble recently but that is due to their huge debt load and the inability of the market to bear any more. Many insurers have left regions where Humana owns the market and left them with little ability to shift costs.




There is a reason why most other nations have universal health care. After WW2 the US government sent a great deal of aid and technical assistance to the rest of the world, particularly to Japan and western Europe. Every county with the exception of the UK wrote new constitutions with help and guidance from technical experts provided by the US government. What the Truman administration could not accomplish at home it did accomplish abroad. Many of these constitutions guaranteed not only health care but also education, housing, welfare and equal rights for women.

unrealist42 wrote:
There is a reason why most other nations have universal health care. After WW2 the US government sent a great deal of aid and technical assistance to the rest of the world, particularly to Japan and western Europe. Every county with the exception of the UK wrote new constitutions with help and guidance from technical experts provided by the US government. What the Truman administration could not accomplish at home it did accomplish abroad. Many of these constitutions guaranteed not only health care but also education, housing, welfare and equal rights for women.