One Healthcare Plan to Rule them All

The AJC had an article today about the state of Georgia  and the intent to move the state benefits plan from two providers to one.

State health officials are considering replacing the two insurance companies — Cigna and UnitedHealthcare — that currently administer the state’s benefits program. The state’s decision could include paying just one insurer to oversee the massive benefits program, which provides health coverage to roughly 640,000 state employees, retirees and family members.

The article goes on to discuss some possible problems but makes it seem like everything will be OK in the end, just like the last time they switched providers.

However this got me thinking a bit. We have a Republican controlled state government and Republicans pride ourselves on our love for the market place and competition. Yet this move will be eliminating choice and competition.

We should all be able to remember from High School economics what happens when there is a monopoly; prices rise, and the quality products and services decrease. Why then is the state considering this for it’s employees?

With competing insurance plans today, each insurance company is highly motivated to provide top notch member service every day to keep your business. With only one plan, if a member receives poor service, what option do you have? None. You can’t take your business elsewhere, because you have no choices. No choice means no incentive to provide great service.

Also, why are we doing this now? At a time where we are already in crisis mode over the implementation of the Affordable Care Act, which even the Democrats are running from, this will only lead to more confusion. Well more confusion for ~640,000 people.While that is not a lot compared to the 10 million people in Georgia, these are the Teachers and other civil servants that are essential to our state being able to run. Don’t they have enough headaches to deal with right now?

One final thought is the sheer size of this contract. A contract to provide health care for all 640,000 state employees is going to be a pretty penny. Why then are we going to limit the amount of economic impact of that contract? Why not encourage and foster competition and  have multiple providers and stimulate the growth of more businesses?

Healthcare is already messed up enough, I don’t see any real need to make it worse by eliminating competition and providing a more expensive and inferior product for our teachers and civil servants.

 

7 comments

  1. saltycracker says:

    Because our politicians are smarter than the officers and boards of multi-billion dollar corporations ?

    • saltycracker says:

      Isn’t GA an “Administered plan” ..for a self-insured program ?
      Don’t know how the state plan works exactly but I’d bid low counting on increased volume and add on fees. Include seminars at the Four Seasons and well placed political support.
      Love M&M´s (monopolies and Medicare) too.

      • Max Power says:

        That may be true I don’t know the details of the GA plan, I’m just speaking in general terms.

  2. Mike Stucka says:

    Except of course another AJC item described a bidding process and long evaluation process. Bidding is of course free market.

    Even with multiple providers, you’d still presumably be locked into a provider for a significant period of time no matter how bad your experience was. For example (schedule made up from whole cloth): Start with Provider A in January, have a bad experience right off the bat, and you can’t change until open enrollment starts in probably October, to take effect in January.

    • Mike: Whereas with a single provider, you would have a lousy experience in January and be locked in for the rest of time, since there would be NO “open enrollment” opportunity to switch.

      We really need to exterminate the tax preference for employer-provided health insurance. Either go whole-hog free market, or whole-hog single-payer. At this point, I don’t much care which.

  3. Or the state could have been proactive in creating an exchange and just given a credit to state employees to buy their own healthcare on it. And for you Obamacare haters, they could have done this before Obamacare when it used to be a conservative Republican idea.

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