Wednesday, August 12, 2009

Insurance Companies Say They Can't Compete With a Public Option--But FedEx and UPS Do Pretty Well Against the Post Office--What's the Difference?

The Post Office doesn’t get to unilaterally fix the cost of all of the things it buys that go into its services--Medicare and Medicaid do.

What critics of the public health plan option often fear is that, like Medicare, a public option health plan would be able to unilaterally set what it pays doctors, hospitals, drug companies, and other providers. Private health insurers often pay providers 20% to 30% more than Medicare does.

If the Post Office had the purchasing power Medicare has it would unilaterally pay whatever price it wanted to for its labor contracts, its trucks, it’s office leases, etc. If the post office had that power just how long do you think FedEx and UPS would stay in business?

Since President Obama and supporters of the Democratic health care plans were asking that question all day yesterday I thought it might be helpful to answer it.


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