The "Public Option" model could be Fannie Mae
The democrats could refute the insurance industry whine about unfair competition by agreeing the the public option operate through a quasi- public corporation a la Fanny Mae. That status would require it to earn a market rate of return which would prevent predatory pricing as would a statuatory requirement that it actually provide insurance rather than cherry picking the best risks and then stone walling on claims..
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That is a really really bad idea.
Were you asleep last Fall when Fannie Mae got bailed out?
Did you also miss where both Fannie and Freddie were investigated for appraisal fraud, accounting problems and inappropriate executive compensation?
Fannie is one of the biggest poster children of a mis-managed government agency that took excessive risk because it knew it had a government-guarantee. Now the taxpayers are on the hook for billions.
Why would we ever want to craft a healthcare solution along the lines of Fannie Mae? What am I missing?
August 3, 2009 10:15 PM | Reply | Permalink
Bill,
Like those of e.g. Enron's these were the responsibility of the particular executives involved. The shareholders and board bear primary responsibility rather than the government altho it certainly failed also
Not splitting hairs but trying to be precise, I disagree Fannie was/is a government agency. As I recall there's a term around like govenment sponsored agency that is used for such public/private enterprises.True.Of course that same moral harard argument applied to AIG ,citicorp etc. I acknowledge it's a problem which would have to be dealt with in the case of any Fannie Mae type solution.
It's also true that it's a problem which will have to be dealt with in the case of all too big to fail entities but that doesn't negate your point that a remedy would have to be found before implemeting my proposed Fannie Mae solution, assuming that it is not intrinsic to the basic concept of a public/private corporation. I agree that question needs to be faced.
Cheers
August 4, 2009 10:41 AM | Reply | Permalink