My Concern about Government Run Health Insurance

When evaluating an individual or organization, I believe past performance is often a good indicator of the expected results in the future. Hence, when the government claims they will give everyone better health care at a lower cost, I look to see how government has performed in other areas for which they have responsibility.

Let's take a look at Medicare. If the government can give everyone better health care at a lower cost, they should have already been able to deliver that result in Medicare. Medicare is already a single payer option run by the government, which is similar to some of the proposals being made. Hmm...I haven't seen anybody hold up Medicare as a model of universal health care that is better and more cost effective. I wonder why not :-)

A recent example is the first time home buyer's credit, which expires on November 30, 2009. An article in Yahoo! news reports that the eligibility for 100,000 out of 1.5 million that have claimed the credit is being questioned. For example, 580 people under the age of 18 claimed the tax credit, with the youngest being 4 years old. Also, 74,000 people appeared to have prior ownership of a home, excluding them as a first time home buyer.

My favorite example is the income tax system the government has created. Every year, I am amazed at the wasted effort and time the tax system creates. The complexity of my tax return seems to increase every year, many times for things that may have little impact on taxes owed or my refund. I wouldn't want my health insurance claims to have the same complexity in the future.

Also, it is estimated that there is a $350 billion tax gap (i.e. the difference between taxes owed and taxes paid) annually on about $2.2 trillion dollars collected net of refunds. That is about a 15% loss on an annual basis.

While I haven't exhausted all possibilities, the performance of the government in the above examples do not give me confidence they can provide a better, more effective, and less costly health care system. If the government could deliver what they claim for health care, why have they demonstrated the capability in other programs for which they have responsibility? To me, this is a case where past performance likely predicts future results.

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This is not financial, policy or health insurance advice. Please consult a professional advisor.

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