In my continuing series of "back of the napkin" sketches, created to help more of us understand the health care debate, here is napkin #2. (I'll post #3 tomorrow and #4 on Thursday).
(You can download the whole series here.)
Is it fair to demand so much reform of the insurance business? Let's think about that. Aside from making a profit for its shareholders, the only value a private insurer provides is to keep costs down for its members.
On the contrary, as the rest of the American economy has tanked, the private insurance industry has done exceptionally well. While the government bails out GM (that's failing in large part due to health care costs), the top three insurers averaged profits of $2,400,000,000.00 each for 2008.
Where will my money go? Depending on the decisions made by government in the next month, there are three possibilities: 1) Into the profits of private insurer shareholders; 2) Into funding new non-profit insurance co-ops and exchanges; 3) Into funding a new government insurance plan that by law cannot make a profit. (It really is that simple.)
See you tomorrow.