On Tue, 15 Sep 2009 05:17:59 -0700, Allan wrote:

> On Sep 14, 11:51Â*am, Michael Coburn > wrote:
>> On Mon, 14 Sep 2009 08:18:47 -0700, Sure,Not wrote:
>> >> AND ALL OF THIS IS A MARVELOUS ILLUSTRATION OF THE BENEFITS OF
>> >> ALLOWING THE PRIVATE INSURANCE INDUSTRY TO FAIL DUE TO ITS OWN
>> >> LIMITATIONS. GOVERNMENT DOES A BETTER JOB OF SOCIAL INSURANCE THAN
>> >> THE PRIVATE SECTOR AND WE HAVE JUST SEEN A LOT OF WHY THAT IS SO.
>>
>> > Ok. Â*Let's try this. Â*Why does the gov't do a better job? Â*They can
>> > print money?
>>
>> 1. Government carries a much bigger hammer than all the different
>> insurance companies when it comes to controlling prices.
>
> The government writes laws that fix prices.

That is an overstatement but essentially correct in this particular
case. Government has a fiduciary responsibility to the people who fund
government activities. And in that regard government health insurance
systems must prosecute fraud and waste while acknowledging and supporting
the need for profits and wages that inure to the benefit of providers.
It is these profits and wages that assure the continued provisioning of
services. Japan has a very serious problem with this in that they set
the price of _EVERYTHING_. NO one would suggest such a system in the USA.

>> 2. Government does not need to make a profit and does not actually need
>> a "pool of money" to protect itself from fluctuations in claims.
>
> The government never includes a cost of capital or opportunity cost in
> their calculations of "overhead". That is deceptive because they
> certainly incur those costs. Medicare Advantage is an example how the
> government transfers risk for utilization. And yes, Medicare needs a
> pool of money - that's where the 1.45% of your income goes if you are
> still employed.

Government is the _source_ of money since 1973. To imply that government
has to face "opportunity costs" in the same way as those who can't simply
create money is seriously delusional. Opportunity costs for government
have to do with judging what can be done without losing control of the
value of the dollar and what should be done to improve the general
welfare. The 3.9% medicare tax is the means by which Medicare "A" is
funded in an ongoing manner. It is a flow and not a stock. So the basic
point remains: Government does not need to "accumulate" money in an
account before government starts an insurance program nor does government
need to retain a pool of money in regard to such programs for any reason
other than accounting and transparency.

>> 3. Government does not need to advertise and sell its policies and to
>> pay a board of directors, a CEO , a bunch of VP's and Â*executives,
>
> Yes, they do (see the website for starters) and yes they do have execs -
> but many of the top employees salaries are paid by the DHHS, not
> Medicare.
>
>> pay bonuses to people who figure out how to screw the policy holders
>> out of their benefits.
>
> Now that was way too funny!

As I said: They do not have the marketing overhead that is usually
associated with a private insurance company. I forget to mention the
return to scale. The website serves a lot more customers than the number
served by the typical private insurance provider.

>>The Social Security Administration and Medicare
>> Administrators maintain very good on line facilities and phone access
>> lines that provide for "customer" interface, and they do it quite well
>> at a low cost.
>>
>> 4. Medicare also processes claims from providers more efficiently than
>> does the private insurance sector.
>
> And this is just plain wrong. Medicare does not process claims at all -
> it is outsourced to the Blues.

Irrelevant. The administrative costs PER CLAIM and PER DOLLAR are less
than the typical insurance company.

>>Â*And there is no reason for
>> profit motives to exist in such a system.
>
> It's called "cost of capital" and in the absence of normal profits (even
> "non-profits make normal profits) they don't survive in the long term.

As I said above: There is no "cost of capital" for a government
insurance operation. There is accountability and transparency and the
need for prosecuting waste and fraud. But there are no "capital costs".

>>Every aspect of insurance on a
>> scale as large as the population of the USA is pure statistics.
>> Statisticians do not cost a lot of money nor do the statistics change
>> so quickly that it takes an army of them to keep up. Â*It is a VERY
>> PEDESTRIAN AFFAIR when done properly
>
> You have provided an interesting insight regarding your naivete. It is
> interesting to see the similarity between that and what is happening in
> Washington on the Dems side of the aisle.
>
> allan

I have the feeling that "allan" works in the insurance "industry". More
importantly, "allan", does not understand the concept of fiat money and
the fact that government is not a business. It appears that the
"naivete" is not mine.

--
"Those are my opinions and you can't have em" -- Bart Simpson