Market hasn't worked with health care

There has been a good deal of discussion about whether we need a public option to provide real competition to private insurance companies. For more than thirty years I was a member of the negotiating teams for my local education association and these experiences may help shed some light on that question.

Health insurance was always one of the biggest items, and in many cases the association and the school board were working together to talk insurance companies down from outlandish rate increases.

Insurance companies always included a 20 to 25 percent charge in their premium for "business expenses," which included overhead and profit. Medicare typically charges only 6 or 8 percent for business expenses and of course, as a government program, makes no profit.

Also, when rate increases were too outlandish, we would seek a new carrier. Carriers would generally give us a low bid for the first year, but would demand a two-year commitment. The second year saw a major rate increase. So we would sometimes go out to bid again.

Isn't that they way a free market is supposed to work? If price is too high, buy from someone else. What we found is that when we went out to bid too often, we would get to a point where no carriers would bid, because we were "unreliable."

Eventually, the only way we could get a bid was to promise to be a good little client and not go out to bid in the face of rate increases. So much for free market competition!

So it seems we do need a government sponsored public option insurance plan. Left to themselves, private insurance companies will do whatever they can to avoid competition. Faced with real competition, insurance companies would have to reduce expensive overhead and profit and abandon anti-competitive practices. That would be good for everyone.

Hugh Brady

Palatine