Hopefully, soon, everything we get will be from Uncle Sam!

Government programs have their purpose, but don’t discount their unintended consequences. There always are negative consequences when politically motivated parties make economic decisions.

The private market isn’t 100% perfect, but I prefer it to politically motivated economics.

Thanks for your comments. You made several points and I’ll respond to a few.

My point is why does government regulate what State Farm can charge? They already have Citizens in place to “Keep them honest” with competition right? If State Farm is way above Citizens, nobody is gonna use State Farm.

With regards to the public option not being self sustaining, IT’S NOT SELF SUSTAINING. an insurance company is self sustaining if the premiums cover their expenses. Citizens’ premiums don’t. They have to charge fees to other insurers and thus they have an advantage in the market.

My point isn’t necessarily to say Citizens is bad. It’s not. But there are effects of having this public option. Namely, they are able to out compete because they can operate at a loss and take market share from private companies. If you are fine with the government option becoming the largest, then I guess this isn’t bad. Let’s identify what we’re really talking about though when Obama presents a public option for healthcare. Just like Citizens, it will become the largest insurer over time.

Thanks

And another thing, Citizen attempts to first match you with an outside agent to find you insurance from other companies first and only use Citizens as a last resort ref: https://www.citizensfla.com/policyholder/obtaininsurance.cfm.

Regarding your Private Market analysis, State Farm is interested in staying in the state if there was a “national catastrophe backup fund”. You know why? Because if you let the private market operate sometimes certain things, say like say INSURANCE is too expensive! Sometimes you have to have a government backed plan (ex. a national catastrophe backup fund) to make it attractive for private insurers operate (guess what that means more taxes).

Here’s the point State Farm is not pulling out of Florida because it has to compete with Citizens. It is pulling out of Florida because regulators rejected State Farms request for 47% and later 67% rate increase.

Guess what State Farm might stay if there was a national catastrophe backup fund.

And finally your pie in the sky “Government bad. Private industry good.” mentality is disheartening. Here’s my real world example I pay 2800 year for insurance in Florida. I pay it to a private company. I haven’t filed one claim and I got hit by three of the those hurricanes in ’04. Guess what that money I’ve been paying for 10 years. Where has it gone? To pay for others that did file claims, to help build a 2nd or 3rd home for a insurance company VP? I don’t know. What I do is that I pay my premium every year in the event that I will need that insurance coverage.

I am FINE with the big bad government as my insurer. I am fine with sharing the burden of Katrina victims. I am fine supporting our military. I am fine paying for police, fire, libraries and schools. Remember our Government is supposed to be ‘by the people and for the people’. (btw- always good to re-read the Gettysburg Address…http://showcase.netins.net/web/creative/lincoln/speeches/gettysburg.htm)

You say that the public option is not self sustaining? WHAT ARE YOU TALKING ABOUT??? And the private option is? OK, I’ll type real slooooow. Repeat after me the government taxes me for services. And now… private sector business bill me for services. OK what is the difference? Oh, yes the government has better collectors.

I wish you the best and enjoy most of your writings. Good luck with your entrepreneurial pursuits. Remember to evaluate risk/reward ratio.

That tax goes back to the government and I have seen nothing that states it will be used to fund anything specific.

To cover that fee, the private insurance company can 1) increase rate for everyone, 2) increase rates for only companies that purchase the $8,000 plan, 3) not sell any plan that costs more than $8,000. There’s no direct connection to the public plan.

The problem is that who determines “gold plated” plans… as for the Citizens example, my standard home policy includes the fee. definitely not a gold plated plan.

I’m skeptical.

In fact, Obama said that the public option was not a requirement but rather a means to keep insurance rates affordable.

The way that a public option would be cheaper than a private plan is by paying providers 75%-80% market rates, not paying brokers commission, and not building a network. This is not exactly helpful towards making insurance more affordable or care better. That’s why I’m against the public option since we don’t need another mediocre government plan.

I suppose indirectly the money charged to high end insurance plans could be used to fund a public option but so could additional taxes. However, in Obama’s speech he backed off a public option so I don’t see how your analogy applies. It seems like a stretch.