In addition to explaining two standard conservative points -tort reform and end to the 3rd-party payer system – Stephen Spruiell reports that a team of NPR reporters unearths the truth about insurance companies: they’re not evil.
In 2001, Aetna was losing $1 million a day. Aetna did two things to turn the company around: It raised premiums, and it pulled out of markets where it did not have a large presence. It turns out, the less competition an insurance company faces in a particular market, the cheaper it can price its products, and the lower premiums are for the insured. Why? Because insurance companies have to wield a lot of clout in order to bargain effectively with the large health-care provider groups in a given area.
The NPR reporters – NPR Reporters! – conclude that Obamacare won’t fix it:
Markets are usually really good at controlling costs. When they work best, products come into existence like cell phones or stockings, they start expensive and then they get cheaper and better. But markets don’t guarantee that everyone can afford the things they need. Government can be good at that, ensuring universal access. But when you’re paying for everybody, it’s hard to control costs.
For [economic historian] Melissa Thomasson, she says that either extreme — a competitive market system where consumers know what price they’re paying and what they’re getting, which would drive the cost of health care down, or a government-run system which would cover everyone — would be better than the accidental mixture that we have today: a really expensive system that doesn’t cover us all.
Spruiell then adds: “Obamacare would pour even more cement over this broken system.”