RedStateVT Responds to Loyal Readers

Loyal Reader tedbob asks how insurers can be kept honest in the absence of a public option.

RedStateVT believes that free market competition is the single best way to ensure “honesty” in the delivery of insurance services (or just about any product, for that matter). If Insurer X can deliver a product more cost-effectively than Insurer Y, the consumer will flock to X. Y will be forced to become more efficient or risk failure. Problems inevitably result, however, when the government steps in and attempts to over-regulate an industry or limit competition which happens in the case of health insurance. For all the myriad of reasons that the mortgage funding market blew-up, it is undeniable that Barney Frank’s exhortation to Fannie Mae and Freddie Mac to “roll the dice” (i.e. increase lending to risky borrowers) was prima facie. Frank is condemned to the seventh circle of RedStateVT hell for his actions, and for his refusal to own up to them.

RedStateVT worked in the insurance industry for 21 years and so is arguably qualified to share some insights. The first is that there are no evil geniuses working at insurance companies figuring out how to screw the public in order to earn otherworldly profits. If this was the case, people would flock to work in the industry and the market would buy up its stock. Neither of these things happens and the truth is that, by and large, the companies are looking to serve their customers in an honest way. Unfortunately, the nature of the insurance contract lends itself to abuse and insurers must protect the honest customers from the potentially dishonest. We are truly sorry if Joe Public discovers that he has terminal cancer and that he has no life insurance to protect his soon-to-be impoverished family. But that does not give Joe the right to now buy a life insurance policy and fail to disclose his condition. Joe should have passed up the big screen TV and the bass boat and bought an insurance policy years ago.

Loyal Reader Cro-magnon argues for a “big tent” Republican Party in response to RedStateVT’s call for cutting Olympia Snowe loose. The big tent theory harkens back to deceased Republican strategist Lee Atwater, who RedStateVT generally admired. RedStateVT agrees that the party should be big enough to embrace Conservatives, mainstream Republicans and most Libertarians. It is not big enough, however, to shelter Democrats masquerading as Republicans such as Specter did for years. And as for Snowe? We’ll respect Cro-magnon’s view for now, but keep a close watch on how she responds going forward to the balance of the Obama agenda.

Loyal Readers may suggest a topic by sending an e-mail to RedStateVT@gmail.com.

Thanks for your thoughts. We’ll dissect more comments and feedback in future posts.