Was reading an article last night regarding North Carolina’s State Health Care system. This is a program that offers employees health insurance. What caught my eye was the headline:
State health plan wants the young, healthy
That’s awesome. Another way of reading that headline would be this way:
State health plan wants the people who don’t have health problems to pay for health care.
I get where the State is coming from, I really do. They have found that they are $138 million short in their fiscal planning. And that’s a lot of money. But the problem I have with this really became apparent to me as I was reading the article and mentally comparing it to my life in corporate America. You see, I have a wife and some kiddos, so I can relate to the manipulation of pricing when trying to cover the family.
The problem, you see, is that the State was $138 million short in their goals. That is, they are losing about $138 million. In other words, the plan that they operate is not profiting. What? How can that be? Is it possible that a business, run by the government, competing directly with private corporations is losing money? Are you KIDDING me? And then it REALLY came home and began to sink in. Why in the world is the government in the business of selling health insurance?
The rest of the article talks about ways that the government is going to have to manipulate their model to become profitable. The problem with this, however, is that the hard decisions required to do that will not be allowed to be made. You see, it would require that some people won’t be able to afford the care that the government thinks that they need. And the reason government thinks that certain people need certain coverage is because, well, because they were voted in by those people. In short, it is NOT the goal of this government to run a profitable health insurance company, or even to provide the care they think they should. The goal of these government folks is to stay in government. There is no way the government can turn a profit here.
Now, I work for a Big Ugly Company [BUC] and I have health insurance through that BUC. But guess what? The insurance that I have through the BUC is not BUC’s Health Insurance. Rather, BUC has negotiated with several different other health insurance providers and found, what I hope, to be the best deal for me, or at least for the BUC.
Why can’t the State of North Carolina do the same thing? Why is it that the State feels that they have to offer their own insurance? If they would contract with a private firm, they would be able to set up SLA’s, minimums and yes, perhaps maximums as well. There would be contractual expectations that would need to be met, and if they weren’t, the State could take their business elsewhere. And in this economy, even the mean insurance companies don’t want that!
Now, the State could even offer to pay 100% of the cost if they wanted to. This isn’t to say that they should, but they could. If they want to feel that they are competitive in the field, attract and retain the best employees, it may very well be in the State’s interest to do this. If, on the other hand, the State finds that they can obtain very skilled labor, say 85% of the best while only paying half the premium, they should do that. It’s called open market. And it works.
The State of North Carolina should be getting back to the business of the State. After all, the State doesn’t manufacture their own paper clips, right?