The Great (False) Health Care Debate: Government Control vs. the Free Market

[marmar]

from ReclaimDemocracy.org:


The Great (False) Health Care Debate: Government Control vs. the Free Market

U.S. government already dictates much of health care system, but protects corporate profits, not citizens


By Dean Baker
Published July 10, 2007

With “SiCKO” rallying popular support for universal health care coverage, defenders of the insurance and pharmaceutical industries are shifting into high gear with their scare tactics. The key to their efforts is to frighten people about the prospect of the government managing their health care.

Whether or not this sounds scary, the reality is that the government already structures the way in which we receive health care. However, the current pattern of government intervention ensures high profits for the insurance and pharmaceutical industries; it is not designed to provide adequate health care.

Starting with a very simple but important form of government intervention, insurance contracts are enforced in a very different way than most other types of contracts. When a person fails to disclose information on an insurance contract, it is grounds for voiding the contract. This means, as shown in “SiCKO,” if a person did not report a pre-existing condition, even if it seemed trivial and irrelevant at the time, an insurance company can treat this fact as grounds for voiding a policy and not paying claims.

By contrast, most contracts have a buyer-beware structure. If I buy a house and didn't bother to notice that the roof was falling in, that's my problem.

We actually have a great model for reforming health insurance contracts that would bring them closer to the buyer-beware model. In 1994, the Gingrich Congress passed the Private Securities Litigation Reform Act. This law made it far more difficult for shareholders to sue corporate executives for stock manipulation. The law essentially requires the shareholder to prove that there was a deliberate act of fraud. It is not sufficient to show that the CEO dumped $100 million of company stock the day before announcing a plunge in earnings. ......(more)

The complete piece is at: http://reclaimdemocracy.org/articles/2007/government_healthcare_market.php