Latest News and Reviews

Health Insurance Reform Increases Competition In Insurance Industry?

There has been a major argument between the congressional sponsors of the health insurance reform and President Barrack Obama that the health insurance exchange will lead to an increase in the competition. As per the exchange, the consumers will be allowed to make a choice between private health insurance plans with the premiums artificially increased by the government mandates and the government program that will artificially lower down the premiums.

Michael Cannon reported in ‘Fannie Med? Why a Public Option is Hazardous to your health’, on Aug. 6 Cato Institute paper that the new program by the government will literally expel a huge number of American from their present health insurance plans as a result of which, their relationship with their doctors will be threatened. The employers will choose to leave their current health plans for their employees and the private health plans will be closing down.

An analysis made by the Lewin Group estimates that if the Congress uses price controls of Medicare and if the programs become available to everyone, it will be able to attract 120 million Americans out of their private insurance plans. This number means more than 50% of the private insurance market. Mr. Cannon reports that a large number of those Americans will involuntarily leave their current insurance plans.

It is amazing that all the fearful people showing up for expressing their worries at the town hall meetings of this summer dismissed by the leaders of the Congress as hate mongers, racists and worse, has been saying.

Mr. Cannon advises that if the Congress aims at increasing the competition and making the health care more efficient, then there are other options available. Medicare should be converted into a program which gives vouchers to the seniors and frees them from purchasing any health care plan from the market.

Thousands of dollars will be made available to the workers which are currently controlled by their employers in the lieu of large health savings accounts. Likewise, the workers will be able to purchase any health care plan of their choice from the market.

Last but not the least; the Congress should increase the competition by asking the states not to deny entry of health plans and health care providers licensed from other states into the market. This means that the health insurance and clinician licenses will become portable across the state borders.

Such reformations will reduce the costs, increase the innovation and decrease the number of people without any insurance. All this will be done without additional spending by the government or higher taxes.

You must be wondering that if the things seem to be too good, then why they have still not reached the tables of Washington?