Susan Pisano of the America’s Health Insurance Plans (AHIP) trade group stresses two major points about health insurance plans:
1. The health insurance industry does not believe they could compete with a government operated insurance plan.
2. Only one percent of health care premiums go toward profits.
Two generally accepted points regarding health insurance administrative costs are:
1. For-profit health insurance have administrative costs of 15 – 30%.
2. Medicare has administrative costs under 5%.
When we put the position of AHIP together with what is accepted about administrative costs it is hard to see AHIP’s concern over the competition a government administrated plan would provide. True, for-profit insurance plans would have to bring their administrative costs under control but that is not necessarily a bad thing. Once AHIP members brought their administrative costs under control the one percent difference (profits) would be insignificant and a free market would determine if they were deserved.
AHIP appears to fear free-market capitalism more than anything else.