Of the two candidates, McCain would rely more on the private sector and market forces to produce changes in the health care system. He says he would free up the market to allow private insurers to compete with each other to create plans with premiums we could afford.

On the other hand, McCain is proposing to change health insurance from a defined benefit to a defined contribution with workers receiving a government subsidy for health insurance - $2,500 for individuals, $5,000 for a family.

Second, his proposal for less regulation of the insurance industry means that industry will be offering grossly inadequate insurance products to people in order to compete on price. The insurers can't af...

Of the two candidates, McCain would rely more on the private sector and market forces to produce changes in the health care system. He says he would free up the market to allow private insurers to compete with each other to create plans with premiums we could afford.

On the other hand, McCain is proposing to change health insurance from a defined benefit to a defined contribution with workers receiving a government subsidy for health insurance - $2,500 for individuals, $5,000 for a family.

Second, his proposal for less regulation of the insurance industry means that industry will be offering grossly inadequate insurance products to people in order to compete on price. The insurers can't afford to provide comprehensive insurance and at the same time make their premiums affordable unless they adopt non-profit models as has been done in Germany, Britain, and Japan.

With McCain's plan, employers will be motivated to terminate their health insurance programs and turn people over to the individual market. As a result, there will be a huge increase in the underinsured population. People will be losing their employer-based insurance and will be swelling the ranks of the uninsured and underinsured. This will result in a massive, catastrophic failure of the system McCain is ostensibly trying to save.

Again, we under appreciate the power of the free market. When there is increased competition the competitors offer more not less. to continue the lemonade analogy...

Masbury and I are now offering lemonade at the same price. We are currently using the same product. How will Masbury get people to buy his lemonade over mine? Will he start using offering less of it. Will he try to increase his profits by leaving out the sugar? No. Consumers will demand the sugar. The only way he will be able to differentiate himself in a market with more than one competitor and homogeneous products is to offer something extra.

The same will be true of health care. If you and I are offering competin...

Again, we under appreciate the power of the free market. When there is increased competition the competitors offer more not less. to continue the lemonade analogy...

Masbury and I are now offering lemonade at the same price. We are currently using the same product. How will Masbury get people to buy his lemonade over mine? Will he start using offering less of it. Will he try to increase his profits by leaving out the sugar? No. Consumers will demand the sugar. The only way he will be able to differentiate himself in a market with more than one competitor and homogeneous products is to offer something extra.

The same will be true of health care. If you and I are offering competing health care plans at the same price one of us is going to eventually find a way to take the others market share. I might, for example, offer free smoking cessation. You might, drop you deductible.

The Des Moines Register ran an editorial a month or two ago saying people who get their insurance through their employers should be scared to death of McCain's plan. For as Kauaiguy points out, likelihood of employer-based plans being terminated is increased, and most of us in our 50s or 60s now have what would be pre-existing conditions if we were shopping for new coverage.

Why shouldn't companies charge more for people with pre-existing
conditions? We charge more for insurance on bad drivers? Is that fair?

Quite a difference in culpability between bad drivers and someone with breast cancer: one was irresponsible, the other just got sick.

Look, our problem is that increasin...

The Des Moines Register ran an editorial a month or two ago saying people who get their insurance through their employers should be scared to death of McCain's plan. For as Kauaiguy points out, likelihood of employer-based plans being terminated is increased, and most of us in our 50s or 60s now have what would be pre-existing conditions if we were shopping for new coverage.

Why shouldn't companies charge more for people with pre-existing
conditions? We charge more for insurance on bad drivers? Is that fair?

Quite a difference in culpability between bad drivers and someone with breast cancer: one was irresponsible, the other just got sick.

Look, our problem is that increasing numbers of people can't afford insurance. Insurance companies make money by minimizing their exposure: ie., dumping customers who become unprofitable. It's a pipe dream to imagine that increased competition is going to result in more companies competing for customers who can't pay.

Decreased productivity, increased bankruptcy, premature death - does it matter? There are some aspects of societal responsibility that doctrinaire capitalism simply isn't well-suited to address: the parts where there isn't money to be made. How many more people must die before we realize the cruelty of such dogmatism?

Excellent points masbury,

In our current health care for profit system, premium money left over because of the relatively low costs of insuring healthy people is used to compensate sales reps., executive salaries, and Wall Street rather than pay for the care of sick. In a system of multiple private insurers, sicker people can't find affordable coverage because insurers try to make money by appealing to good risks and avoiding bad ones.

In a system with multiple insurers, each must rely on the size of its client base to defray the cost of claims. More competition only increases the number of insurers whose smaller client bases have commensurately less available capital to defray these cos...

Excellent points masbury,

In our current health care for profit system, premium money left over because of the relatively low costs of insuring healthy people is used to compensate sales reps., executive salaries, and Wall Street rather than pay for the care of sick. In a system of multiple private insurers, sicker people can't find affordable coverage because insurers try to make money by appealing to good risks and avoiding bad ones.

In a system with multiple insurers, each must rely on the size of its client base to defray the cost of claims. More competition only increases the number of insurers whose smaller client bases have commensurately less available capital to defray these costs. As each insurer alone has little bargaining power to control rising costs, they inevitably rely on policies that restrict access, curtail services, and deny claims to maintain profits and stay competitive. More competition may result in more choice among insurance providers but each provider will offer fewer preferred doctors and hospitals in an effort to control costs by restricting access.

In short, private health insurers have a serious limitation in that they they cannot provide the economies of scale necessary to control costs and remain a viable option should America ever decide to care for its sick and provide health care at affordable prices.

It's one thing to deny lemonade to customers who can't pay. It's quite another to deny people water and watch them die.