"The public option is displacing private insurance."


What happened when Florida instituted a government-run insurance option in response to rising property insurance premiums? Alex Tabarrok points us to the following history lesson by the Independent Institute's Randall Holcombe:

After Hurricane Andrew hit Florida in 1992 some Floridians were having difficulty purchasing homeowners' insurance.  (The reason: rates are regulated, and at the regulated rates some properties are too great a risk.)  So, the state government formed Citizens Property Insurance Corporation, which is owned and operated by the State of Florida.

As originally envisioned, Citizens would charge rates above those charged by private insurers, to make Citizens the insurer of last resort.  Nevertheless, Citizens found plenty of customers.

After two bad hurricane seasons in 2004 and 2005 property insurance rates in Florida rose, and in his campaign for the office, current Governor Charlie Crist promised voters that if elected he would see that their property insurance bills "dropped like a rock."

One tactic he used was to change Citizens' rate structure so it was competitive with private insurers.  His idea, like President Obama's idea with health insurance, is that with a public option, private insurers would have to keep their rates in line or risk losing customers to the government insurer.

That's what's happened in Florida. Today about 30% of homeowners' policies are written by Citizens, which is the largest property insurer in the state.  It's about to get bigger too.  The largest private insurer, State Farm, had a rate request rejected last year, and now is pulling out of the state altogether (for property insurance; they'll still insure your car).  As the largest private insurer pulls out over a three-year period (that period negotiated with the state), Citizens will get an even larger share of Florida's property insurance.

Everybody in Florida knows Citizens is a fiscal time bomb.  Already, every Florida insurance policy (on homes, boats, cars, etc.) pays a surcharge that goes to Citizens, but Citizens still doesn't have sufficient reserves to weather a major hurricane.  When one comes, Florida taxpayers will be on the hook for the bill.

The legislature knows this, and actually passed a bill last year that would have done a great deal to solve the problem by partially deregulating rates private insurers could charge.  State Farm would have stayed in Florida had that bill taken effect, but it was vetoed by the Governor.  The public option is displacing private insurance.

Now, it's not clear that something similar would happen immediately if the House's variant on the public option for health insurance became law. According to the CBO, under the House bill, the public plan would actually have higher premiums than private insurance options, and only about 6 million people would be enrolled. But if Congress eventually decided to "fix" this by forcing premium rates down by, say, pegging reimbursement fees to Medicare, as many of the most liberal legislators want to do now, it's more than plausible that we could see a similar situation develop in the health insurance market. 

NEXT: About Last Night: Lefties and Limbaughism

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  1. The Florida government should not be in the property insurance market. There are no significant market failures for homeowner’s insurance. This is a system best handled privately.

    1. Re: Chad,

      Agreed, but one clarification: There are no such things as Market Failures, period. ANYTHING can be best handled privately.

      A Market Failure is a concept invented by Keynesians and Neo-Classical economists to explain away the obvious differences between their mathematical models and reality, a type of fallacy known as an Ad Hoc Hypothesis.

  2. Why do we have the public option when it comes to the military?

    Perhaps we can make the fire department a private company and bill those people that have fires? Those who can’t pay…face loosing their property … and the proceeds can go to the private fire company.

    Let’s close down all of the public schools and only make people that have kids pay for private schools…Those people that can’t afford to send their kids to school..we can use their kids as garbage collectors and toilet cleaners.

    Let’s get rid of government run police. Let’s use private security companies.

    Let’s just get rid of all government regulations.

    Let the free markets and free minds reign.

    1. We have a public option for the military because they sign up to risk their lives for what is supposed to be our freedom. They deserve the best medical care in the world on the taxpayer dime. This is the only role our federal government should have in health care, providing it for our troops.

      1. They are NOT defending any of our freedoms. They are defending Israel and oil as far as I can see.

        I understand you libertarians not wanting to pay shit for anyone who is sick. My question is, why should I pay for war ?

        1. They are defending Israel and oil as far as I can see.

          Israel and Oil? Do you get all of your political arguments from bumper stickers? This is so stupid I don’t even know where to start.

          1. Iraq? Iran? Afgan?

            1. We are not even in Iran yet. Anti-Semite.

              1. Yet…But unless Iran tests a bomb sometime soon, they will be attacked.

                1. I hope it is before the test.

              2. And, i am not Anti-Semite just because i don’t believe in giving my money toward the protection of other countries…that includes Mexico.

                1. No, you are an anti-Semite because you want Israel destroyed.

                  1. I wouldn’t want Israel destroyed.
                    Many generations of Israelis have been born since 1947…There’s nothing no can (or should) do.

                    I’m saying that I don’t want my tax dollars to go to war. I’d rather spend it on sick people.

                    1. So? Do it.

                      Government functions that provide an infrastructure in which free markets operate is a false-choice argument. (Perhaps you haven’t heard of “provide for the common defense”? Probably not, was written by an old boring dead white guy.)

                      Even so, our military uses contractors for quite a lot of functions, there are such things as volunteer fire departments, and frankly I think you’d find quite an improvement if there was more ability to choose schools. Look at NH’s town-level tax/school division. School achievement there is quite good.

                      How blind and spoiled you are. I am sorry for you.

        2. We don’t think you should pay for war, either.

      2. What is unstated is that private medical insurers won’t cover soldiers. There’s too high of a risk of death or maiming, even during peace time service.

        Plus the Federal government is contractually obligated to fulfill the benefits we soldiers and veterans are due, because of our enlistment contracts. We have willing suffered deprivation, injuries, separation from family, the loss of friends, Constitutional rights, and are literally thrown into harms way with little if any say in the matter.

        Also National Defense is one of the few Constitutionally valid areas that Congress is allowed to spend federal tax dollars.

        1. Look, I believe everyone is entitled to access to healthcare.

          1. Military members and Vets who have been disabled, or due to their time in service, can receive single payer healthcare through the VA per our enlistment contracts, which the Federal government is obligated by law to honor.

            While the VA is inefficient, expensive, and would never work on a national scale, it works well enough to deal with the small number of the wounded on the rolls.

            While you might not think it’s very libertarian of me, I’ll tell you this much; those goat-smelling shit-heeled pukes in DC owe my people that much for the blood we’ve spilled, the limbs we’ve lost, and for the years of our lives which we’ve given in service to this nation.

            That stated, the rest of the US citizens would be far better served by open market alternatives than they ever could be with single payer health care.

            Scaling up the VA to take care of the whole US is a horrifying thought to me. It would crash under it’s own dead weight.

            1. I work with a doctor’s office that serves the local VA home local pro-bono (he used to serve in the army). The condition that they come in….very, very sad. Fix the VA, and Fix medicare if you must, but leave the rest of us alone.

            2. Scaling up the VA would be horrible, but a good public option wouldn’t do that. VA is wholey subsidized by taxpayer money. A good public option would be paid for by premiums; just like private insurance. And because of low overhead and low marketing costs, it would be MUCH cheaper. Now the Dems need to stop caving in a put one through. Screw bipartisanship.

          2. We all already have access to healthcare. There are doctors and hospitals in every corner of the country. This isn’t deepest, darkest africa.

            1. The US already has health care for everyone,its called medicaid/medicare. These programs are running out of money. Eventually someone needs to pay. Who will it be? You! In the form of higher, much higher taxes. You will pay more money and get much less.
              Obama is a Marxist/Socialist, everything he does makes sense when viewed from this perspective. Nothing he does makes sense from the view of a Capitalist.

              1. The question is why are they out of money? Medicare has been around for years and it’s never been argued that it’s “out of money.” This has only come up after the Bush adminstration destroyed the economy. Hmmm. Puzzling isn’t it? And do you really think the status quo is a free market capitalist system? I’m sorry to burst your bubble, but it’s devolved into a fascist style corporatism.

          3. Do you believe everyone is entitled to “access to sex”?

            1. Entitled to access to computers? The Internet? Private transportation? Housing? Clothing?

              I’m sure the manufacturers of those goods would be happy for the government guaranteed profits.

    2. And everything else you listed, sure, I wouldn’t mind if they were all privately run. Who learns anything (other than how to lie and skip class) in our public schools anyway?

    3. Yo Edward/Alice/whatever, there is such a thing as public goods. Some things cannot be provided in a rival or exclusive way, so we provide these goods collectively, through government. Very few libertarians propose privatising the army or fire service entirely, and I have certainly never heard that argument on this blog.

      But please, do go back to beating your strawman now.

    4. Government is the institution who was the monopoly on the legal use of force. Defense and security are appropriate functions to this institution. Theft -including redistribution of wealth- is not.

      1. By “defense and security” I assume you’re refering to the “Common Defense” clause in Art. 1 Sec. 8. Well there is also the “General Welfare” clause right after it. And a sensible public option (which is not being proposed) would definatley apply. Closing thought: So private industry is allowed to redistribute wealth to benifit the itself, but government can’t do it to benifit the lower/middle class?

    5. Read Rothbard’s The Ethics Of Liberty, it answers all of these questions and more. For the record, libertarians are against war as well.

    6. Alice, you should check some of your facts before posting.

      There are some areas that do have private fire service and if you are not a member of the “pool” the fire service will watch your house burn. They will protect nearby “pool” properties but not non-members. If they did, there would be no incentive to join the pool.

      Many subdivisions have private security to protect residents cause “when seconds count, the police are only minutes away”.

      There is much wrong with much government regulations. Most government should be handled at the lowest levels possible meaning city, county and state, not at the federal level. If regulations were handle more at the state level than free-markets would work better as you would have 50 states trying things instead of one federal government. The feds should focus on international issues and let the states manage domestic issues.

    7. Alice —

      Now you are being an extremist.

      An irrational extremist, to boot.

    8. The key to any public policy issue is to analyze it to see if it makes sense, all things considered. The outer extremes of anything seldom make sense- be they Mao’s paradise or Ayn Rand’s toll-sidewalks. Other things, such as closing down the public schools or enabling private health insurance by removing the bad government policies that screwed up the market in the first place, make a lot of sense.

      Alice is talking like an extremist; extremists seldom propose sensible alternatives. Nancy Pelosi is also an extremist (based on the comment Alice could be Nancy Pelosi under an alias if Nancy was a bit smarter).

  3. Let’s make sure that no-one runs for office that opposes the free markets in anyway. Deny voting rights to those who do not support 100% free markets.

    1. Nah, let’s just deny voting rights to people who resort to strawman arguments.

  4. Now, it’s not clear that something similar [i.e. the public option becoming the primary option] would happen immediately if the House’s variant on the public option for health insurance became law.

    Let’s put things in perspective – what was described above would not be the first or only instance where government intervention in a market would generate scuh distorsions. One has only to look at the other public “option” that already exists, which is Public Education.

    Public Education is more expensive per child than private education, yet it is the primary education system people choose, for the simple reason that the cost is artificially hidden from parents, as the overall cost is spread among all citizens. The Public Option has displaced the less expensive private options, leaving only those that survive thanks to value-added attributes such as prestige, a perceived better quality of education, you name it. If one takes this as an example of how a Public “Option” distorts the market, one can make a better guess of how a Public Option on health care would look like in the future.

    One of the things that has NOT been said about the new Health Care bill is that it would immediately compel doctors to unionize, since the bill does not have a provision to curb malpractice settlements, and a doctors’ union would be seen by doctors as a way to protect themselves from lawsuits, as they could apply a higher leverage against their primary “employer” (i.e. the FedGov); this would in the same manner as has happened with public education, reduce the quality of care in the US.

    1. One of the things that has NOT been said about the new Health Care bill is that it would immediately compel doctors to unionize, since the bill does not have a provision to curb malpractice settlements, and a doctors’ union would be seen by doctors as a way to protect themselves from lawsuits,

      It is illegal under federal law for doctors to unionize. Ask the doctors in Idaho who tried it, and are now just trying to stay out of jail.

      1. No problem … with the SEIU’s support, that law would be overturned in a New York minute!! Then with far more nurses, techs, etc. than doctors, they’d use the EFCA to force all medical staff to join the SEIU, doctors and all.

      2. The doctors have a union already, one that has a very good track record of using the state to beat the shit out of scabs;

        The American Medical Association

          1. The AMA has

      3. Re: prolefeed,

        It is illegal under federal law for doctors to unionize.

        And just as easily it can become NOT illegal.

        1. I see doctors, nurses, and orderlies working under the table.
          Orderly: Looks like a pretty full bed pan you got there.
          Patient: Could you empty it?
          Orderly: Sure, for a tip. (I was gonna make a crack about piece work, but that would be crude)

    2. Notably, Canada experiences recurrent doctor’s and nurse’s stikes under it’s single payer system. Where low wages for health-care professionals has led to shortages of them, and consequently longer hours (in addition to lower pay).

      I think you are dead right in the public school analogy.

    3. I have two kids, one a sophomore at a state university and one in public high school. At the per-student rate of our district, it would have cost me $14k/year to fund their education out of pocket, on an income of roughly $55k. That would have been very difficult. I pay roughly $1500/year in school taxes directly and a significant sum through the products I purchase, because the businesses necessarily pass the tax to me as a customer. Over my lifetime, I will properly fund my kids’ education through high school, but if I had borrowed the money as I went, I’d never get out from under.
      Possibly the taxes should feed voucher programs so that private schools meet parents’ needs, still funded publicly. I understand the arguments both ways. This one has been personal to me because I don’t know where I’d have gotten them educated for $1500/year.

      1. You’re forgetting that the per-student rate your district uses in absolutely no way resembles the actual amount you would spend if you were homeschooling or if a more efficient organization were doing the educating. Public schools are notoriously inefficent.

      2. Just looked up 2 private high schools in my area – one charges $9725, the other $7400. Not cheap, but no where near $14k, and both have good educational reputations. There are cheaper and more expensive ones in the area too, those were just the two I happened to look up. Im guessing the $7400 is close to average.

        Both offer tuition assistance programs for low income families too.

  5. Nah, they’re just waiting for a federal bailout in Florida. It’s a marginal state.

    1. I think you meant “waiting for a feral bailout”.

  6. Fuck State Farm. They tried to fuck up the already fucked up auto insurance market in NJ, and Christie Whitman threatened to throw them the fuck out of NJ. Whitman was responsible for actually opening up the market by bringing in Geico and Progressive and a couple others. State Farm is a bunch of crybabies.

    1. They tried to get out of NJ, which I always thought was good common sense for unprofitable business lines. If you’ve got any links to support your “fuck up” charge, let’s see them.

  7. The most delicious thing about this whole thing is that guy who lowered the public option rates to the point they started pushing private insurers out of the market…is one of the leading GOP candidates for president in 2012.

    The lunatics are in charge of the asylum.

  8. When you tell people what’s actually in the “public option” instead of pretending it’s full of magical ponies, you find out it’s quite despised:

    Would you favor or oppose having the government create a new health insurance plan to compete with private health insurance plans if you knew you could be forced off your current health insurance and onto the government-run plan?

    Total Favor 17%
    Total Oppose 75%

    Would you favor or oppose having the government create a new health insurance plan to compete with private health insurance plans if you knew that there was no guarantee that you could keep your current doctor?

    Total Favor 20%
    Total Oppose 75%

    Would you favor or oppose having the government create a new health insurance plan to compete with private health insurance plans if you knew that it could limit the treatments and medications you could have access to?

    Total Favor 16%
    Total Oppose 80%



    1. What a shocking poll. What’s the next question? Would you favor or oppose the public option if it meant you were beaten with sticks every day?

      1. Fuck, man. I actually agree with Tony. That’s a push poll if ever there was one.

      2. I don’t know. Does the health reform legislation require that qualifying health insurance beat people with sticks? Because it is the mandates coming out of that legislation that will induce employers to drop their current private coverage and dump millions of employees into the public option, where they may find their current doctor and treatments aren’t covered the same anymore.

        1. The point is, that’s your opinion. You shouldn’t be shoehorning it into the poll question if you’re actually interested in finding out what people think about an issue.

          This is like Polling 101. I’m surprised that a non-retarded commenter like yourself doesn’t understand this.

          1. My opinion? It is inherently obvious that placing more mandates and costs on private plans while offering a public plan that is explicitly set at a competitive price will induce some third party payers (i.e., employers) to change plans.

            If you want people to judge the public option based on the lies told by Obama and parroted by the media, then you can ask the “neutral” question. If you want to see whether people want a public option if it might mean a change in their own health care, you phrase the question to get that answer.

      3. I would vote for goddamn Caligula if it meant Tony was beaten with sticks everyday.

        1. And we’d get entire horses in the Senate instead of just the back quarters we have now.

    2. There will always be a limit to “the treatments and medications you could have access to.” There are not enough resources in the universe to pay for all the care that everyone could possibly want. The fact that this has to be pointed out does not speak well to the rationality of this debate.

      I agree the poll is worthless–talk about loaded questions.

  9. But if Congress eventually decided to “fix” this by forcing premium rates down by, say, pegging reimbursement fees to Medicare, as many of the most liberal legislators want to do now, it’s more than plausible that we could see a similar situation develop in the health insurance market.

    No, they’re going to “compete,” remember? That means they’re going to run it at a huge loss the first few years to drive the private insurers out of business, then take a hacksaw to reimbursements.

  10. Nice topic you got here, good post too, glad I passed by. Thanks for sharing this. Glad to know something about insurance


  11. Already, every Florida insurance policy (on homes, boats, cars, etc.) pays a surcharge that goes to Citizens, but Citizens still doesn’t have sufficient reserves to weather a major hurricane. When one comes, Florida taxpayers will be on the hook for the bill.

    Well, good thing that Florida isn’t prone to major hurricanes, so what’s the worry?

    ohhhhhhh……I see.

    So to take this analogy a step further, one could say that the “price tag” for the Government run public-option health insurance will not add to the deficit (giggle).

    Unless of course, someone gets sick.

    Republicans could turn around that nutbag from Florida’s argument about Republican Health Care Plans.

    Democratic Health Care Reform: It’s Free and won’t add to the deficit! Just don’t get sick. Or hurt. Or cancer. Or anything else that might cost something.

  12. With programs like this, it’s never about the first iteration. The first set up may look good, and may not even cost that much. But as son as the next “crisis” hits, changes come along and we get that gentle nudge down the lubed incline.

    What socially targeted program created by government has remained the same size or decreased since inception?

    1. Exactly, it’s classic mission-creep

  13. The largest private insurer, State Farm, had a rate request rejected last year, and now is pulling out of the state altogether (for property insurance; they’ll still insure your car).

    My friend was talking about something like this. Some 1980’s presidential candidate tried to pull some sort of crazy rate structure in the state he was governor of. When insurance companies decided to leave, they made some sort of financial penalty to club them with.

  14. What was Florida supposed to do? They were faced with three problems when Citizens was created: 1) insurers were forcing people out of their houses with 400%+ hikes in their premiums (much of Florida is on a fixed income remember?); 2) insurers were canceling people who had paid premiums for 30 years and made only 1 claim; 3) insurers were leaving the state anyways.

    Even if the rate increases the insurers wanted had been allowed you’d only have ended up in exactly the situation we have in healthcare: people in safe, well-made homes (bodies) paying ultra-high premiums while the rest of the state goes uninsured. What should Florida have done? I’m genuinely curious.

    1. People lived in Florida for centuries before property insurance even existed. One problem is that people are now building homes in places where past generations knew better than to build homes. Another is that you have a huge influx of Northerners moving to a subtropical peninsula and expecting their new home to look like it was built in Wisconsin. People on the Southern coastlines used to build their houses on stilts to minimize the potential for flood damage from the inevitable hurricanes and tropical storms, but your modern carpetbagger doesn’t want a “weird-looking” house like that.

      1. Bingo.

        There are very good reasons as to why most native Floridians tend to live further inland.

        Those who moved to the coastline communities over the last thirty years had little idea of just how dangerous the weather conditions would be, nor are they aware that their homes were built on reclaimed swampland or low lying artificial islands supplemented with the sand dredged from the bottom of the Intercoastal Waterway.

    2. The rates private insurers charge are reflective of the risks they run. When hurricanes are raking the properties you insure on a regular basis, you need to charge high premiums just to make sure your insurance company is around after each one.

      Just because you charge less doesn’t mean the risk is lower, it means you’re putting people who don’t live in high-risk areas on the hook for paying for whose who do.

    3. I live in Florida (have for 15 years) and I think that it is greatly unfair that I have to pay higher insurance premiums living in central Florida because people that live in southern Florida and near the coast don’t or can’t affort the real cost of insuring their houses. If you can’t affort to live somewhere move! The insurance companis are not a charity. They are a business and are run to make money. Also, insurance is not a bank account, you are paying for coverage. That coverage is a day by day event. When it no longer works for the insurance company, they stop your coverage and you stop paying them. See how that works? If rates go up it is becuase claims go up. If you want to make insurance more afforable for everyone, stop requiring the companies to make use of uniform rates. Allow them to charge each according to the expected cost of that coverage. Some will pay more based on where they live and the value of their homes but others will pay less for the same reasons. One side does NOT fit all and having the government force the issue is what gets everyone screwed.

      1. “If rates go up it is becuase claims go up. ”

        That isn’t true the majority of the time. Studies have shown rate of increase (funny rates rarely go down regardless of rate of claims) for premiums is directly tied to the performance of the insurance companies investments. Claims are not a determining factor unless true cataclysms happen.

        1. The usually unstated corollary of that is that rates decrease or at least slow down when investments do well. Claims do of course ultimately determine rates. After all, unless the insurance companies are incredible investors, most of the money paid out in claims comes from premiums. For an industry with 3%-4% profits, they are obviously primarily in the business of shuffling money from those who pay premiums to those who make claims.

          Claims usually don’t cause short fluctuations in rates only because insurance companies are in the business of predicting risk and have factored minor fluctuations in claims into the rate already.

    4. What was Florida supposed to do? … insurers were forcing people out of their houses with 400%+ hikes in their premiums (much of Florida is on a fixed income remember?)”

      Insurers were not forcing people out of their homes, the insurers were refusing to engage in a contract on terms the homeowners wanted. Any consequences that followed are the homeowner’s fault and problem, not the insurance companies.

      If I refuse to serve you food in my restaurant because you cannot afford it after the menu prices increase, I am not forcing you into starvation. You just cannot afford my food.

      In your view, apparently insurers are obligated to keep writing policies, even if the business is not profitable?

      Where the hell do these people come from?

      1. “Where the hell do these people come from?”

        Public schools?

        1. I remember when Dad moved the family to Florida in the early 70’s. He was a retired fireman, and planned where we lived very carefully. He made sure we were well out of flood zones and had rapid access to evacuation routes just in case of “the big one”. Now when I go back, I see 20-30 story condominiums built on barrier islands I could row over at high tide! Damn fools! Who’s fault is it if they get swept away in a storm? “Well we’ll just steal money from other people so I can live in a mansion oceanside with a view.” Suckers!

  15. rtfa:(The reason: rates are regulated, and at the regulated rates some properties are too great a risk.)

  16. what should Florida have done?

    The same thing we should do with Healthcare. Open up the market between states and you create a bigger pool of insured, thus lowering costs. Insurance isn’t welfare, and if your house is next to the beach why should insurance companies be forced to charge the same rates that people pay who don’t live in hurricane prone areas pay?

  17. the most evil idea here is that government will require individuals to have health insurance.

    insurance companies (and/or the government, whomever supplies the insurance) are insuring against the prospect of illness of individuals on the basis of their knowledge of the probabilities of some number of the class of insured individuals becoming ill. If they (the insurers) know that all individuals in the class must be insured, presuming that their knowledge of probabilities of illness are close to correct, the insurers are guaranteed a profit.

    To elucidate my point let me provide an analogous case. Suppose that 10 individuals are entered into a perverse lottery. When the one and only individual winner is chosen, he/she wins $100. All others lose $10. Further, suppose everyone is required to purchase insurance for the lottery, which will cover any loss. So, the insurer knows that it will have to pay out $90 in any case. The insurer, given the requirement to purchase insurance, will charge each individual greater than $9, thereby ensuring a profit. Ultimately, the lottery ticket holders lose, regardless of the prevailing market rate for insurance against loss (since the market cannot bear less than $9 per individual). This is precisely (given that medical insurers have accurate data regarding probabilities of illness) what will prevail under mandatory health insurance regimes. The gamble of providing insurance will turn into a nearly-sure thing, and, ultimately, the individuals will pay dearly (and unnecessarily).

    1. Requiring everyone to have insurance solves the adverse selection problem..

      1. But increases the moral hazard problem.

  18. I can understand the frustration of people who had lived in their houses for 30 years, never made a claim, and had their rates go up. The problem is, they were/are living in 30 year old houses built prior to modern hurricane codes. This goes beyond “they may need a new roof” to “they might need a whole new fucking house”. And there are entire neighborhoods like that.

    When I was working in (commercial) Property / Casualty insurance, the company I worked for had an exclusion zone of 5 miles from the shore. The only way any property within that area was getting property insurance was if they were a national company, with 90% (or more) of their property away from the exclusion zone, and we had the rest of their lines (Commercial Auto, General Liability, Workers Comp, Umbrella).

    Ironically, the property crash should have helped ease pressure on rates.

    1. The rate pressure would have helped prevent the property boom in Florida.


  19. Nancy Pelosi just called and said that it’s not the glaring economic flaws in plan that are the problem with the Florida property insurance public option. The real problem is that Republicans are running it.

  20. Why are people shocked to find that the public option eventually must displace the privates? One can not compete against the referee.

  21. And of course, State Farm is villified because of their pulling out of Florida’s housing insurance.

    Charlie Christ is now campaigning on how “conservative” he is. Kind of hard when these facts emerge (finally!).

    Thank God we have a conservative alternative in Mr. Marco Rubio.

    I will be so glad when Christ isn’t governor here. Jerk.

  22. Elaboration: Christ is campaigning to be our Senator against Marco Rubio.

  23. “I will be so glad when Christ isn’t governor here”.

    You’re going to burn in hell for that comment.

  24. The idea of national healthcare is not bad per say. It’s the idea that the government should be holding the money and making the purchasing decisions. Government borrowing of Social Security dollars is proof that it cannot be relied on to hold the healthcare insurance dollars. Of course government procurement programs for almost everything is evidence that the government should not be making purchasing decisions for individual healthcare.

    What about a system like the GI bill where the money / voucher goes to the individual and the individual decides how to buy healthcare. Add in tort reform and negotiate annual prices on a state by state basis. Legalize drugs that pass FDA stage 2 (assuming appropriate warnings).

  25. I will be so glad when Christ isn’t governor here.

    I thought it was only the president that was supposed to be the Messiah.

  26. Christ? No, Crist is too self-involved and tanned to be Christ. However, just as Jesus has the Anti-Christ, Crist has the Anti-Crist.

  27. “After Hurricane Andrew hit Florida in 1992 some Floridians were having difficulty purchasing homeowners’ insurance. (The reason: rates are regulated, and at the regulated rates some properties are too great a risk.)”
    Well, not really regulated, but regulated at a price below replacement cost, with no consideration that living next to the ocean in a state prone to hurricanes should cost you, the homeowner, and not poor taxpayers…but I quibble. O, and isn’t that exactly how we plan to deal with health insurance.

  28. The Citizens Insurance situation is even worse than presented here. When Citizens started, the intent was to provide windstorm insurance of last resort. Prices were set higher than private plans to encourage private insurers to write policies and eventually allow Citizens to fade away. It was working well until the 2004-2005 seasons.

    Then it became a lever to force insurance companies to keep rates low or not to raise them. When the state disallowed some of the rate increases, the industry rebelled. They couldn’t cover their costs and buy the reinsurance (insurance for the insurance companies, usually from Lloyds) at the same time. The state then targeted State Farm with threats of wide ranging subpoenas, basically a fishing expidition to find anything on them. Result: State Farm pulled out.

    State operated Citizens then went against its charter and undercut the private companies. But when they priced out reinsurance they found it too expensive. So the went naked, potentially exposing the state to bankruptcy.

    I’m not sure where the reinsurance stands now. Could be they have it, but probably not. The point is the state took shortcuts for themselves they would never allow private operators to do.

    There are distinct parallels to government run health care. When costs exceed revenues they just keep spending money forcing the country deeper and deeper in debt. Happens at the Post Office, Social Security and Amtrak. There is no reason it won’t happen with health care.

  29. Why people have the public option when it comes to the defense?

  30. The GOP is a wholly owned subsidiary of Corporate America.

    The fact remains that big insurance by refusing care to patients and reimbursement to doctors over typos has ticked everyone off. They have a monopoly over the whole process and a well financed lobby team (including Lieberman’s wife) and representatives on both sides of the isle.

    A friend of mine recently laid off just he and his spouse is paying $2,500.00 dollars a month for his COBRA. Health insurance costs more than his mortgage. Anyone taking up the insurance industry’s cause doesn’t know what they are talking about.

    If you think the insurance companies are going to voluntarily lower their cost while having a monopoly over the process ? you are being disingenuous ?Over 60% of all US bankruptcies are attributable to medical problems. Most victims are middle class, well educated and have health insurance – (The American Journal of Medicine)

    The insurance companies and their representatives in Congress would love to perpetuate a business model that is crippling our overall economy ? a bunch of great Americans aren’t they?

    90% of the wealth concentrated in 1% of the population is no way to run a country but a heck of a way to establish a royalty ruling class. Yacht sales can not sustain 350 million people. I’m for the public option, competition and a level playing field or break up the big insurers like we did AT&T.

    Paul Burke
    Author-Journey Home

    1. You’re looking at the obvious, like an audience looking at the magician’s waving hands while he’s busy putting the rabbit in the hat.

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