In speeches today, Democratic lawmakers claimed their push for a public option was to create competition in the insurance industry.
The free market is better at creating competition than the government.
Right now there is a great deal of angst about health care. There is a market for change!
So, free market, let's get cracking and create some alternatives.
I would love to find a group willing to set up a Medical Savings and Loan. What is needed is about 10,000 people eager to take the self-financing route. The capital, of course, would come from the folks starting the program.
Establishing the program is a matter of taking the money currently going into pool based insurance and diverting it into a lifecycle based savings and loan structure. Those with high claims experience would end up paying a bit more for their care. Those with lower claims experience would end up with large amounts of cash in their medical savings account.
As people would be negotiating directly with their doctors, prices will drop.
There is nothing to prevent an existing pool based health financing company to switch from the pool structure to the savings and loan structure.
If I had access to such a market, I would be setting a program ... instead of sitting here feeling lumpy. (contact me).
BTW, the primary reason for the lack of competition in the current market is that insurance companies with insider connections in state regulatory boards have been able to systematically weed out competition.
Insurance is actually a strange industry. In insurance one collects premiums in advance of claims. This makes it easy to start a gig. Of course, when the reserves are insufficient the system implodes.
The Medical Savings and Loan has people owning their savings account. They would also own the loan reserve. This direct ownership of assets and risks minimizes that harmful affects that people can suffer if they join a pool with inadequate reserves.
This is a reform that could be placed into effect without special legisation. It would greatly reduce the inequities of insurance companie. The formula can work for a non-profit coop. So, people driven into a frenzy at the thought of insurance company profits could beam about the idea.