Inequities of government-run health insurance programs

Following is an opinion piece written by Paul R. Zietlow, CLU, ChFC, RHU, NAIFA IOWA and shared with his permission.

The “public option” is a term being used for a government- run health insurance program. While change is needed, a government run plan would soon put private plans out of business due to inequities of the plan. The government:
•    Would not have to pay state premium tax like private plans. Private plans currently pay $40 million to the State of Iowa every year.
•    Would not have to set aside reserve funds to pay future losses like private plans are required to do.
•    Would not have to cover Medicare’s “lower payments” that are shifted to private insurance plans by providers to cover their cost of operation.
•    Would use the IRS to collect premiums and not count it as health care administration cost.
•    Would replace several thousand jobs in Iowa with jobs in other states.
•    Would eventually determine eligible procedures and set the prices (rationed care).
•    Would not follow individual state mandates like private insurance are required.
•    Could operate at a loss and still remain in business. They would raise other fees and taxes to make up the difference.
•    By lowering prices would force small rural hospitals and physician clinics out of business. “Older” physicians may simply “retire” rather than work for less income creating an even greater shortage of doctors and longer waiting lines.

We have a great healthcare system in Iowa. To make it better and lower the cost, we need to:
•    Require healthcare providers to publish their fees for consumers to see before the service is provided.
•    Allow consumers to make the choice for their own healthcare and (like Lasik eye surgery) pay for those choices.
•    Guarantee to insure everyone (government can subsidize high risk consumers).
•    Require consumers to pay the basic cost of healthcare (deductible) and insure the catastrophic loss (pay 100% of everything about the deductible).
•    Utilize Health Savings Accounts to pay for basic healthcare (deductible) and incorporate wellness expenses

When consumers have options and pay for services, they find better solutions than the government’s perceived “free” care. Government monopolies have not been more efficient than private industry in the past, so why do we think that that the “government option” would be any better?