dolphin314etc asked: It can’t be like the Bad Bank idea, where all the bad loans go to be taken off the books of other banks — all the toxic assets are bought up by the Bad Bank — It can’t be the Crazy Government Insuror who covers everybody, no matter how risky, no matter if they can pay or not.
So, OK, then how could it be? If a rational person were hired to come up with a plan for a Public Option Health Insurance Arrangement, what the heck would it look like.
Rational here means able to create an economically self-sustaining policy, it does not mean drunk on fake compassion based on giving away other people’s money (the Liberal sort of idea of rational).
Ten insurance companies, each with, say One Billion in capital invested by the Treasury — so all the shares of all ten companies are held on the Treasury Balance Sheet.
The companies are told to 1. At an absolute minumum break even. 2. If possible make a profit. and 3. If possible make a large profit. and 4. Do not write insurance for people who cannot pay premiums consistent with the risk of that insurance agreement. If people have pre-existing conditions, do as the private insurors do a) make them wait a year or two for coverage of those conditions, and b) when they do get coverage charge them a premium based on their true risk going forward. 5. Remember, your task is to compete with the private insurors, but make a profit if you can, and do not be the Crazy Government Insuror (like the Bad Bank).
Now, out of the 10 some will run through their capital ($1 Billion) and fold — and when that happens each and every employee and executive should be fired and permanently barred from further service in the Federal System (that way they have some skin in the game).
No additional capital will every be made available, from the US government, to any of these 10 firms. They cannot operate on a lid off infinite money supply basis, or they will just be the Howard Dean Money Machine, that hands out freebies to everyone on the street, like up in Vermont, where all the money machines operate that way, so you should really go up there.
Maybe 2 or 3 of the firms will make a profit. If this happens, a goodly share of it should go as bonus money to the execs and employees of that firm. They won for Uncle Sam and for their nation. So, they get a bit extra — not like Wall Street Bankers, but better than the average civil servant — so look for 6 figure bonuses, but not 7 figure.
Maybe five of the firms would operate around breakeven. Their business models are viable, but not hugely remunerative. That’s OK. We want them there. We want their heads above water at all times, and we are not adding money, but as long as they can hang in and write good policies, which they can get underwritten, and re-insured, let them practice their craft — let them serve — they also serve who just serve, without making any significant profit. Blue Cross sort of operates that way. Bless them!
This would be a rational system. It incorporates the idea of experiment and diversity (10 firms). It punishes failure (fairly harshly). It rewards success (with a generous hand), and it sustains those who just serve without big losses or profits.
It has a fixed up-front cost ($10 Billion). Excellence and only excellence should decide who gets to play with that money. No quotas, no timetables, no civil service extra points, no veterans preference — Straight excellence, nothing else — it’s business not PC LoveFest time.
My guess is that over ten years 10 to 20 million people could be taken out of the problem by this plan (very cheap). I think that after fifteen years only 3 or 4 of the government insurors would be left — they would be the Darwin-Strongest with the Smartest Most Viable Business Models. It should be possible to scale them up using private market capital raised on Wall Street, or in Peking, or Dubai.
Quod Erat Demonstratum
Let’s make this question a No Clowns Zone. OK?
I’ve tried to be serious and original in my question. How about if people who can’t even read it, please just don’t bother to put up a post. Have you no shame? For 2 points are you really willing to bozo around on this issue at this time? Do you ever expect to be taken seriously in your life? Have you ever been? This is a question for serious people. It’s a solid question, based on an original idea of mine. Comments on it could be authentically useful, if people are willing to care, think, and work a little. My posts are read by a lot of people in Washington and repeated in a lot of places on the internet. So how about the clowns go elsewhere, just on this question, please don’t post jokes and insults.