Corporate Research Group’s Weblog

We all know that Obama wants to increase the number of government-run health plan options available to Americans.  No wonder health plan stocks have taken it on the chin since the President’s budget came out last week.

Kevin Baker, writing for TheStreet.com, takes the notion one step further: “The nightmare scenario, a ‘Medicare for All’ system,…could put many health insurers out of business. On the other hand, the U.S. automobile industry and other sectors consider the end of company-sponsored health care the route to international competitiveness.”

Good point.  When you consider the impact the automobile industry still has on our economy, it’s surprising there hasn’t been a harder push for government-run solutions. 

Name-dropping time.  Nearly two years ago, I asked economist Paul Krugman how a nationalization of the health insurance industry might work, and he pretty much laughed in my face (if you can laugh via email).

He wrote: “I don’t see any legal reason why the government would have to nationalize anything—it’s not seizing the assets of insurance companies, it’s simply offering a new service that happens to compete with what they offer. If a town that has previously expected homeowners to arrange their own trash disposal begins regular garbage pickups, does it have to buy out the private haulers who have been doing the job? It’s the same principle. The politics may be another issue, but that’s a much better analogy than, say, the government nationalizing the steel industry.”

And so, again, it comes down to the politics being “another issue.”