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Annals of "free market" stupidity

Here's the California Medical Association's take on Anthem's 30% rate hike and its lawlessness:

The long list of state violations by Anthem Blue Cross, California's largest for-profit insurer, underscores the need for market reforms to hold insurers accountable so patients get the care they deserve when they need it, the California Medical Association said today.

Steve Poizner, California's insurance commissioner, announced that Anthem Blue Cross violated state regulations on more than 700 occasions between 2006 and 2009 for late payments of claims, giving misleading information to consumers and failing to cooperate with regulators, among other misconduct.

"These violations show a pattern of insurance companies putting profits before patients," said Brennan Cassidy, MD, CMA president. "These violations, combined with the huge proposed rate hikes, make the case yet again that we must reform the insurance market so that its top priority is to serve patients instead of its bottom line."

Brennan Cassidy, MD, can't seem to spot a flaw in his argument. What could it be?

Blue Cross is a for-profit company! It's supposed to put profits before patients! That's what it's supposed to be doing! That is the fiduciary responsibility that Blue Cross has to its shareholders.

The answer isn't to try to make Blue Cross into something it isn't and can't be, but to abolish the insurance companies entirely!

NOTE We really do need to have a post on the "1/6 of the economy" talking point, as CD justly points out. To me, the proof by example is the other countries who have implemented single payer systems, none of whom collapsed, but that's not really a strong enough argument; no detail.

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quixote's picture
Submitted by quixote on

He's also a candidate for the Republican nomination to run for Governor of California, and this little come-to-Jesus moment coincides a bit too much with trying to get his poll numbers out of the cellar.

Where's he been? He was elected to his current job in 2006.

Still, we'll take what we can get. Better that he tries to bump up his numbers with the truth than the usual Rethuglican shlock.

Submitted by lambert on

Since he's reasoning from wrong premises.

quixote's picture
Submitted by quixote on

He's not right in any real meaning of the word. But it is kinda fun to watch the Insurance Commissioner wake up to the fact that there's insurance out there he's supposed to at least pretend to keep an eye on.

madamab's picture
Submitted by madamab on

One has to give the reason for the business' existence. The traditional reason is "profit."

I am always shocked by the insistence of "free-market" true-believers on investing businesses with other reasons and characteristics.

I always think of businesses as two-year-old children who just learned the word "Mine." If you don't discipline them and keep them on the right track, they'll grow up into greedy monsters.

gqmartinez's picture
Submitted by gqmartinez on

Back when I was a Democrat in 2004, I helped beat him in an election. He spent 6+ million dollars (IIRC) on a state Assembly race, way more than the candidate I was supporting. I remember for quite some time it was just the candidate and myself going canvassing on weekends.

Poizner is very much a conservative in the Obama/Schwarzenegger mold, meaning probably horrible for the economy. Much like Obama and Schwarzenegger, Poizner doesn't say much more than poll tested one-liners and paints himself as some sort of post-partisan saint. He's definitely a bright guy, but he's is not very trustworthy and again, that whole libertarian thing has been repeatedly shown to be bad for economies. I also remember him making a very ignorant comment on minorities and education that really pissed me off.

Kick Baucus to the curb's picture
Submitted by Kick Baucus to ... on

First, it is as absurd as arguing we should have WWIII because it would be good for the defense industry. Drug dealing is a significant part of someone's economy, but no winger is arguing for legalization. It's an irrelevant argument to say we should do something just because someone makes money from it.

Second, the economic relevance is backward. As a part of the economy, all things medical, which includes Medicare and Medicaid as well as medical real estate, investment, doctors, drugs, equipment, insurers, etc., amount to about $2.35 trillion. Of that total, the amount directly impacted by a single payer plan is the insurers. Everything else continues on: doctors still treat patients, hospitals still operate, etc.. Of the insurer portion, some office workers could push paper for the gummit run program. The CEOs and their stock options would be up the creek.

But if one considers that insurers' overhead and profits act as a TAX on all other businesses and workers, then their loss becomes someone else's gain. I think the net effect of single payer on the economy would be to stimulate business and increase both hiring and wages.