The Health Issue Is An Insurance Issue

When we consider the complaints about our health care system, they generally all get round to the point before long: it's our health insurance system that's the problem, not our health care system. Like our Congressperson, we all like our own doctor, if not the class of people in general.

Nobody is arguing that we need to radically change the standard of health care available in the U.S., though there is a lot of bickering about access to it (and there will always be so, at least until uniform immortality is available at no cost).

Instead, these are the problems we see and hear about: the uninsured because they have no choice, the uninsured by choice, the cost of insurance in general, and for specific groups of people and their families, the sharp upward movement in deductibles and disallowed expenses, the treatment of uninsured.

Some pundits have announced the death of health care reform due to the bailout expense. I say: wrong! The federal government has just acquired the necessary infrastructure to allow it to implement President Obama's health plan, and it did so at a bargain-basement price. It's called AIG.

I may be wrong, but I don't think AIG is a big name in medical insurance today. That doesn't matter, because it clearly has a superior distribution system (sales, licenses, correspondent relationships) for insurance products. If I'm right, the critical ingredient needed to be added to that is medical claims expertise. Certainly something they could hire, but a large part of what they would need to figure out in terms of coverage standards has been done already for the Congressional health plan, which is what Sen. Obama has promised us.

The key things that need to be accomplished in the time between now and Jan. 20 are the following:
1) don't break up AIG! Keep its assets together. Sure, the Board of Directors and such might want to sell off assets to get money to buy down the government share. The Feds should use the voting power of their 80% to make sure that don't happen. Just sell off "non-strategic" assets--and perhaps recover some cash from East Asia by selling those (huge) businesses to investors over there.
2) Transfer AIG's executive oversight from Treasury to Health and Human Services--actually, that can wait until Jan. 20. A good first-day executive order.

There is one more component needed, actually: a health insurance marketing division. AIG and HHS (and whoever is the government's advertising agency!?) will need to work together a lot on how to present the economic argument for their new product to the American people so it looks and feels like a real commercial health insurance product. Only better.

And you know what? It's going to make money. When that happens, a lot of people's long-term gloom-and-doom social models are going to look quite different. There will be a lot of complaining from the competition, but they will adapt or die, as they should.

There will also be some public payoff (utility, and earnings) in such things as flood insurance, and guarantees for infrastructure development projects. 21st-century Government has been forced to stick itself inside the tent (whether one or Glass-Steagalled into two) of the de-regulated insurance and banking industries, and they're in to stay, now.