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Originally Posted by Cimarron29414
This would not work because:
1) The government will not raise premiums to control cost. They will eliminate care or raise taxes.
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If what Obama said is true, the public option will set premiums based on costs so that the plan is self-sustaining. If the public option is subsidized, then private companies will at some level not be able to compete at all. Currently for profit insurers do compete with non-profit insurers but the profit margins are small with for profit insurers relying on time and large premium volumes. If the government wants competition, they will have to minimize subsidies.
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2) You can not cherry pick the healthest. Companies have a set fee for all employees. A non-smoking, 22 year-old pays the same rate as a 400 lb., 58 year-old smoker. This, my friend, is the real problem with the high cost of health insurance.
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There are known group plans that are more profitable than others. Just as an example using sports: One group plan could include NFL active and retired players, one group could be golf active and retired pros, one group could be current and past professional boxers, and another group could be young healthy female professional basketball players. Each group would have unique characteristics, and could be rated (premiums) differently. An insurer's experience could result in some of these groups generating a profit or a loss depending on what they need to do to get the business. It is possible that a company could not rate professional boxers in a manner were they could charge reasonable premiums and earn a profit. If that were true the group of boxers would end up in the public plan because no private company would touch it, but the public plan may be forced to take it. If the NFL players include mostly old retired players with lots and lots of joint problems, heart problems, brain problems, compared to the WNBA with an average age of 26, companies may really want the WNBA and not the NFL. The same logic could apply to, lets say the video game industry compared to auto workers.
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It should work like car insurance - the higher the risk, the higher the premium. Don't like your premium? Drop 200 lbs and quit smoking.
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I agree that every person should have their own personal policy rather than group policies through their employer.