Who would you rather buy health care insurance from? The government or AIG?

[Joanne98]

Consider that a talking point.

I'm seeing that there is confusion about the health care industry. There's NO difference between the banking crisis and the health care crisis.

It's both GREED AT THE TOP!

Remember it was AIG, the INSURANCE COMPANY, that caused alot of the banking crisis.

The insurance industry is at the heart of ALL of our crises. It's insanely profitable and completely CORRUPT! It can't be fixed.

Get rid of them and all will be well.

[Eric J in MN]

1. Get rid of credit default swaps.

It wasn't highly regulated insurance products which sank AIG.

It was an unregulated financial product: credit default swaps.

[napi21]

5. CDS's aren't in themselves bad. The problem was in not having

the cash capital to back them if they went bad. Basically they're an insurance against an investment going bad, which is the same as a life or homeowners policy you would buy. The ins. co is betting that you won't die young, or your house won't burn down, but if either of those things do happen, they are required to have sufficient money available to pay the claim. AIG et al didin't have the money to pay off the claims when the CDS's went bad.

[zipplewrath]

8. Prime cause

That was the primary problem with the CDS. However, I have heard that there hasn't been much study of their potential "multiplicative" effect. Multiple CDS' were sold on a single asset, often involving people with no connection to the underlying asset. Thus, when the underlying asset was lost or damaged, there were multiple payouts. There was no tracking of this connection. Even if it was tracked (i.e. regulated and reported) it isn't clear anyone would have known how to use the information or assess risk to the larger markets.

[napi21]

9. It still boils down to having sufficient $$ to pay claims. You know

that some very high level corporate officers have multiple insurance policies on their life. The beneficiaries vary from family, to the co. they work for. It still shouldn't matter how many policies are taken out on the same assets, as long as the claim can be paid if it's due.

[Eric J in MN]

11. Would there be a big downside to banning Credit Default Swaps?

"Credit Default Swaps were invented in 1997 by a team working for JPMorgan Chase."

We managed without them before 1997.

[napi21]

16. Not that I can tell. The only downside I can think of is the gov't

telling the stock market what they can & can't market. I would prefer to let it be the brokerage firm's decision what to sell. but put restrictions on the different products, based upon potential risk.

[zipplewrath]

17. That's the claim

But many folks have pointed out that the magnitude of the CDS situation was unknown, and to your example would have been like all the CEO's dying in the same year. That's alot of money moving around because of a concentrated set of assets. Combine that with the reasons those assets are affected to begin with, and no one is really sure what happens.

[Uncle Joe]

12. What if a large institution or investor holds CDS's in a particular industry,

could they drive that industry under while making huge profits by purchasing vast quantities of put options in those same industries?

In this particular example, I'm thinking of what the banks may have done to the automobile industry, knowing they were going to get 100% return on their CDSs from the government.

[lostnotforgotten]

2. Neither - Comprehensive Single Payer All the Way!

eom

[MercutioATC]

3. Who do you think you pay if you get single-payer?

The government.

[Joanne98]

4. But not shareholders. Take the profit out of it and it will work.

[MercutioATC]

6. I'd rather see an expansion of FEHBP. It's an existing system and it works.

Federal Employees Health Benefits Program

[eridani]

19. It can't possibly work if they try to expand it.

I agree with you that federal employees insurance is really good--I've been hearing about it for years from my brother. Have you ever considered why private insurers offer such a good deal? Two reasons, actually. First, employed adults, compared to the general adult population, are comparatively healthy. That is a form of cherry-picking right there. The other is that they are highly motivated to offer really sweet deals to a group of people some of whose members make important decisions that can affect their bottom lines. The insurance that my brother gets is subsidized by the tax-paying public, 18,000 of whom die every year because they can't afford health care for themselves.

The companies that provide goodies to people making decisions that affect thair profits are not going to tolerate having their select risk pool crapped up with a bunch of actual sick people. That's what expansion would involve.

[lostnotforgotten]

7. Exactly - Our Taxes, Not Health Insurance Company Profit Motives

eom

[ananda]

10. So.. exactly how are AIG and the govt different?

Anyone?

[leftstreet]

13. The govt bails out AIG, not the other way around?

I don't know.

[Warren Stupidity]

20. The government is a non-profit organization

that does not operate on the mandate "maximize shareholder value". The government is organized as a democratic republic, which is to say that it is run by representatives of the people who are democratically elected to be our representatives, it is a government of the people, by the people, and for the people. We have a direct say in how our government funds and operates a health care service payment program, we have no say in how AIG runs theirs other than indirectly through regulatory legislation. AIG operates for the benefit of its major shareholders and nobody else. Our government, at least theoretically, operates for the benefit of us.

[global1]

14. Bottom Line Isn't The Insurance Industry Fronting A Gigantic Ponzi Scheme?......

I'm not wanting my house to catch fire or my car to crash or my health to go south - but I like millions upon millions of other people are paying money to protect themselves should there be a problem. Insurance companies are hoping that more people pay into the pot than take out of the pot. When they do have to pay out - they are using those people's funds that are still being paid in for that rainy day. Isn't that like a Ponzi scheme?

In times of crisis like a hurricane or a tornado or forest fires - the insurance company loses - because of a massive one time pay out. If they don't have the money to cover that pay out - aren't they no better than Bernie Madoff? In Madoff's case he'd need new investors. In the case of an insurance company - not only are they able to recruit more business by using fear to sell - but they can raise their rates as well.

[LaPera]

15. All insurance companies will throw you off if they find a way to not pay for your care-it's business

The insurance companies ALL want to make as much money as possible for profit and the best way to do that is to NOT pay your hospital bills through some technicalities, legal or illegal...

Hey, the insurance corporations are in business - to NOT spend their money on your medical care....the insurance companies just want you to continue paying your premiums to them...it you get too sick you're gone....

But not the government with our tax dollars....if you get sick it'll ALL be paid for and no rejections like the insurance corporations who like ALL corporations are always cutting corners to make larger profits at your expense!

[Wednesdays]

18. K&R

:kick:

[mmonk]

21. We're already paying AIG.