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How to kill health insurers

Kirsten Gillibrand did not raise her hand on July 27 when a moderator of the debate questioned 10 presidential candidates who wanted to get rid of private health insurance. But that's the result she prefers, all the same.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Gillibrand, Democratic Senator from New York, supports a & nbsp ;"Medicare for all"& nbsp; program covering all Americans, similar to the plans of Bernie Sanders and Elizabeth Warren. But it would not force people to leave the private insurance system. Instead, she left & nbsp;Someone joins Medicare, if they wanted, and require insurance companies to compete for patients with the giant government program. "data-reactid =" 16 "> Gillibrand, Democratic senator from New York, supports a" Medicare for all "program covering everyone – Americans, similar to the plans of Bernie Sanders and Elizabeth Warren, but she would only force not people to opt out of the private insurance system, but would let anyone join Medicare, if they wanted, and force insurance companies to fight over the market for patients, the giant government program.

"If they want to be competitive, let them lower their rates," Gillibrand recently told Yahoo Finance at its New Hampshire campaign headquarters. "Let them cover more things. I challenge them to compete. I doubt that they do it.

If Gillibrand is right, millions of Americans would willingly give up private insurance and join Medicare instead, paying them lower premiums than private insurance would cost. This would cause insurers in a kind of spiral of death: when they would lose patients, they would have to increase premiums to cover a smaller and smaller pool of people, and the increase in premiums would send more in addition to people to Medicare. The end result would be a de facto single payer health system, guided by consumer choice rather than a government decision. Private insurers would go bankrupt because they could not compete with Medicare in terms of quality and price while making a profit.

Gillibrand and others argue that private sector healthcare companies can never be as profitable as a government program, because of the benefits they must yield to shareholders and millions of dollars that they must pay to CEOs and other senior executives. However, the scenario could be quite different if Congress extended Medicare eligibility to the entire US population.

A winning campaign line

For-profit insurers have a strong incentive to be as efficient as possible – unlike the government – and they may be able to beat Medicare in terms of price and quality of service while making a profit. For-profit companies, FedEx and UPS, compete with the US postal service for parcel delivery, and are barely outperformed. The postal service, on the other hand, loses money every year and is constantly the victim of inefficiency and political interference.

Democratic Senator Kirsten Gillibrand, D-N.Y., Presents for a roundtable with health care workers during a campaign stoppage on July 11, 2019 in Pittsburgh. (AP Photo / Keith Srakocic)

Employers would also play an important role if there were a new option for public health care because they are the source of coverage for nearly half of Americans. A new program that would take people away from employer-provided coverage would cause serious problems for them, who would also face a growing financial burden if health care plans became more expensive. Insurance coverage is an important part of employee compensation, and there would be sudden differences in compensation if some workers get insurance from the company and some do not. This alone could make such a system impractical. Other "public options" would only be open to those who could not get affordable coverage from the employer, in order to keep intact the existing system – which works reasonably well.

Nevertheless, Gillibrand and many other Democrats may have a winning campaign line when they say that corporate profits are inconsistent with affordable health care. "The problem with the insurance industry is that their primary obligation is to their shareholders, not their patients," she says. "Then they will take decisions all the time that are not in your interest."

Improving health care is a major concern for voters in the run-up to the 2020 elections, and Democrats feel they have a major advantage over President Trump and his Republican compatriots, who have no real plan except to repeal the Affordable Care Act. But many Democrats, including leader Joe Biden, believe it's important to leave private insurance in place instead of channeling everyone into a Medicare-like system. Despite all their flaws, health insurers have some reluctant supporters.

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