Health insurance companies are scared shitless.
How scared are they?
So scared that they've told Congress they are willing to drop the lucrative practice of risk rating. Risk rating is where someone like myself - a healthy, young white male - can get excellent health coverage for less than $2,000 a year.
However, someone with the same age and health status but who had cancer when he was 5 and has been in remission ever since will pay more than $10,000 per year.
Exchange the word "cancer" in the last sentence with just about any sickness from severe acne to HIV/AIDS and you have risk rating in a nutshell.
People who are sick, whether by genetics or lifestyle, are forced into debt by sky-high insurance premiums or back-breaking medical bills.
But in the name of cooperation, insurance companies are now willing to get rid of this approach, albeit with a slight catch - if Congress forces every single person in the United States to buy insurance coverage.
Seriously, guys?
That's like GM saying it'll improve gas mileage if we are all forced to buy at least a Chevrolet Malibu. What's more, they still retain the right to charge more by age and geographic location, and they can still deny claims at will as they so often do. Basically, the only thing that changes is they make tons of money because they now have 50 million new customers.
So what would scare them into such generous bargaining, you might ask?
One word: competition.
President Barack Obama and Congress are considering forming a new public insurance plan similar to the one currently employed by Medicare (government health insurance available to every citizen over 65) that would be available for anyone in the United States to buy.
This plan would be cheaper than private plans because Medicare can run on administrative costs of about three percent, compared to about 26 percent for the private sector.
These cost savings are possible because unlike for-profit insurance companies, Uncle Sam doesn't have to pay dividends to investors, doesn't have to pay ridiculous executive salaries, doesn't need to spend gobs of money on marketing schemes and doesn't need to hire legions of middlemen to deny claims and peddle their products.
All in all, we waste over $300 billion a year on this administrative muck wrought by health insurance companies.
Republican lawmakers, the dukes of competition, are vehemently opposed to this new public program because "forcing free-market plans to compete with these government-run programs would create an unlevel playing field and inevitably doom true competition," says Mitch McConnell, Senate minority leader.
You heard him - allowing competition into the marketplace would doom competition. For example, we wouldn't want to lose the competition we have in private health insurance now, which is five companies dominating most of the market share in almost every state.
One real concern not being articulated by most opponents of the public plan is that it would underpay physicians and hospitals in order to generate lower yearly premiums for customers. However, this is unlikely since providers (physicians and hospitals) would not be willing to accept a public plan that underpays them, and people would not buy it if they knew they couldn't use it anywhere.
If nothing else, the physician lobby is too strong to let something like that slip by were it ever to become a serious consideration.
In short, health insurance companies have a right to be scared. They know that they can't compete with anything like Medicare. Medicare is more efficient, more robust and better-liked by customers and providers than private plans.
And while just having a government-run health insurance side-by-side with the private system isn't quite the single-payer option we need, it's a big step in eliminating the for-profit parasite plaguing our health care system.
Brandon Sack is a second year biomedical sciences graduate student.
