Health insurance quotes and Mitt Romney

As always, headlines take ideas out of context and make them sound worse than they are. In the New Hampshire campaign this January, Mitt Romney said people should be free to change insurers if they want. Obviously, if they are unhappy with the service, a free market will provide them with choices from competitors. Hopefully, if people act rationally and keep moving their business until they are satisfied with the quality of service, the bad providers will be forced to improve or end up bankrupt. When Romney said he "likes" to fire people, what he meant to say was he likes having the right or freedom to fire people who do not provide a good service. There's nothing wrong with this. Even Ron Paul has come out to defend Romney. Yet, in a hotly contested primary, the other candidates have picked on this as further evidence Romney is an asset-stripping exploiter of labor. He buys up companies, terminates the loyal workers and sells on the assets for a quick profit. This is not the way you want to run a country. Unless, of course, it’s being run with too many workers in high-paying jobs who fail to contribute to the wealth of the nation. Perhaps it does need a hard-nosed capitalist to fire the overpaid civil servants who contribute little and slim down the private sector workforces by refusing earmarks and direct subsidies. For the record, Mitt Romney won New Hampshire with Ron Paul in second so it must be alright to talk about firing people who deserve to be fired.

Except, of course, there's a world of difference between going into a shop or restaurant, finding poor service and expressing your unhappiness by walking out and never going back, and firing your insurance company. Everyone would want the right to terminate all services relationships for cause and, for the most part, this does apply to the short-term service relationships. But firing the insurance company that pays for your healthcare is a different ballgame. As more and more people find private health cover unaffordable, we are rapidly approaching the point where half the population are covered in health plans provided by employers. Although some employers do provide a choice between insurers, the vast majority only allow a choice between different plans offered by the same insurer. In practical terms, being employed means you have little or no control over the choice or continued "employment" of your insurer.

Why is there no choice? The reason is the present state of federal law and the tax system. There are no national insurers. Every state is sovereign and regulates its local insurance market. Except the employee health benefits are not taxed. This gives a direct financial incentive to employers and their employees to maximize the levels of health benefits available. It also explains why spending on health care has risen so fast over the last fifty years. Employees have been taking as much value as they can out of the system. The result is the collapse of the private health insurance market. It also means half the population are brainwashed into never changing their insurers. Cheap health insurance has therefore become increasingly hard to find. There's no incentive for insurers to offer a better service because few people ever fire them.