Health Insurance 103

One of the many myths that Obama and the Democrats are spreading about health insurance is that there isn't sufficient competition in the insurance market, and therefore either a government-run insurance plan or government-led insurance exchange needs to be established to create such competition.

Reality so differs from this myth, it boggles the mind. There are many large, publicly-traded health insurance companies in America that compete aggressively with one another. The biggest include: United Health, Wellpoint, Aetna, Cigna, Humana, Healthnet, and Coventry.

But there are many other health insurance providers, and remarkably, some of the biggest providers in any given state are not-for-profit Blue Cross Blue Shield plans.

That's right: not-for-profit providers are already some of the leading providers of health insurance in America.

Now, the reality is, the not-for-profit health insurers need to operate profitably, so they can maintain and grow their capital base and have the financial means to serve customers properly. But that is just another way of saying, a proper not-for-profit insurance system has to reflect market realities and not the whims of politicians.

Obama and the Democrats know this, since the prominence of these not-for-profits in health insurance is unmistakable. So when they claim the need for government-provided competition, it is their excuse for ultimately creating a government-only insurance market. Because rest assured, the government will underprice insurance (as it always does, as evidenced by government-provided car and hurricane insurance) and ultimately drive the private insurers out of business.

So the public option, or its weakened version in the form of health exchanges, would slowly but surely lead to full government control of health insurance in America. And when the government eventually pays all the bills, it will then exert overwhelming influence over all aspects of healthcare, from drug development to how hospitals and doctors treat patients.