Obama’s inconsistencies on health care

David Henderson writes, of the public option bit in Obama’s speech last night:

Obama says that the “public insurance option would have to be self-sufficient and rely on the premiums it collects.” OK, so imagine the Obama plan passes with this option. If it’s going to be self-sufficient, it can’t collect any funds from government. That seems to be the general agreement about what “self-sufficient” means. When you start a plan, you need employees and a building. You also need money to advertise. Where do you get it? The usual way in the private sector is that you get loans and or investments from venture capitalists. I’m assuming that everyone agrees that with a government plan, the second option, venture capital, is out. That leaves loans. But even getting loans requires putting out some kind of literature, getting some kind of permission, etc. So you probably need lawyers and a few other people. How do you pay them? You might say, “With loans,” but you don’t have loans yet and you can’t get them without the lawyers. Will the lawyers just provide their services gratis? See the problem? Right from the getgo, the government would have to put in some money, thus breaking Obama’s promise.

Which, more or less, is what I thought when I heard the public option described.  It strikes me that it will either be very ineffective and “self-sufficient” or it will have some chance of accomplishing something and be funded by the government.

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8 thoughts on “Obama’s inconsistencies on health care

  1. There’s a distinction between self-sufficient and appearing out of thin air. HR3200 provides $2B in start-up funding that is to be paid back into the treasury over a 10-year period. Obama’s clearly talking about the long-term when he says “self-sufficient” and I don’t really see the point in pretending not to understand that.

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  2. Yeah, seriously, why pretend that the public plan wouldn’t be able to borrow some money and pay it back? Are you asking the private plans to insure low-income people without getting the subsidies the government has promised them?

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  3. The answer is that it won’t be self-sufficient. It will be bloated with nepotism and political favors, expenses higher than private insurance company profits, and it will be funded in part by tax-payer money. When the regulations prevent private companies from covering many consumers without going broke, they will dump into the public plan, and it’ll incrementally take the place of private insurance companies — except for boutique companies for the rich — and these companies will likely be taxed to death.

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    • you wouldn’t be referring to something like this :
      The latest self-appointed car czar is Massachusetts’s own Barney Frank, who intervened this week to save a GM distribution center in Norton, Mass. The warehouse, which employs some 90 people, was slated for closure by the end of the year under GM’s restructuring plan. But Mr. Frank put in a call to GM CEO Fritz Henderson and secured a new lease on life for the facility. [full article]
      or this: Nonetheless, in December OneUnited got a $12 million injection from the Treasury’s Troubled Asset Relief Program, or TARP. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee.

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    • I imagine that it will, eventually, turn into something analagous to the education debate.

      There will be parts of the country where the health care is stellar.
      There will be parts of the country where the health care is not stellar.

      The only workable “solution” to helping the parts of the country where the health care is not stellar will be giving them more money. This won’t really result in better health care outcomes overall. It will be determined that not enough money will have been given.

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  4. It will probably be very ineffective in any form that could possibly come into being. (Certainly at controlling costs via competition at any rate, which is the only measure I can think of by which to measure “effectiveness.” I mean, it’ll cover a few people, and presumably not fail outright at that if it comes into existence. That’s about all its charter would envision; hopes for cost containment etc. are just gravy.) But it will be there for some people who want it.

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