For those who think that there can ever be fair competition between the government and private companies, another example to the contrary

Compare this letter to what Senator Bill Nelson (D-Fl) said on Tuesday:

"Many senior citizens have come to rely on [Medicare Advantage] coverage, and suddenly walking away from it, I think, is unconscionable," Nelson said Tuesday.

This letter is much less strident than Nelson's quote.

From the WSJ:

Political intimidation has always been part of the current Congress's health-care strategy: "If you're not at the table, you're on the menu" is tattooed on every lobbyist and industry rep in Washington. But Max Baucus's latest bullying tactics are hard to believe by even these standards, as the Senate Finance Chairman has sicced federal regulators on the insurer Humana Inc. for daring to criticize one part of his health bill.

Earlier this month, Humana sent a one-page letter to its customers enrolled in its Medicare Advantage plans, which offer private options to Medicare beneficiaries. Humana noted that, because of spending cuts proposed by Democrats, "millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable." The Kentucky-based company also urged its customers to contact their Representatives. Pretty tame stuff, as these things go.

Mr. Baucus took it as a declaration of war. He complained to the Centers for Medicare and Medicaid Services, the federal health-care agency, which on Friday duly ordered Humana to cease and desist. CMS claimed the mailer was "misleading and confusing" and told the company it has opened an official probe as to whether the mailer violated laws about how the insurers that manage Advantage plans are allowed to communicate with their customers, as well as other federal statutes. . . .

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Blogger AnonymousDoe said...

Actually Humana does quite well by the Federal Government:


Health Plans Need Government Programs

Even as private insurance companies and their advocates in Congress and the media assail proposals to expand government-sponsored insurance, health plans are relying increasingly on government programs to boost their profits. One illustration of that are the recent results of Humana.

Despite the recession, Humana’s second-quarter net income jumped 34 percent to $281.8 million from $209.9 million for the prior-year period. For the first half of 2009, Humana’s net leaped an astounding 68 percent to $487.5 million from $290.1 million in the first half of 2008.

The main reason for this difference was that pretax income in Humana’s government segment increased by 62 percent to $404.7 million in the second quarter, and more than doubled to $570.8 million in the first half.


What’s interesting about this comparison is that private insurers that rely more on government programs are doing better than those that have less government business.

9/22/2009 3:22 PM  
Blogger Unknown said...

Regarding competition in practice between a government plan and the private insurance industry politicians simply don't grasp a basic economic truth - that fair competition implies the possibility of failure on the part of each of the competitors. And the politicians will never allow the governement option to fail. Washington will keep a government plan affloat for as long they can infuse it with tax money and, thus, there will be no fair competition to alledgedly keep the private insurance companies "in line" ...only a socialized medical plan to absorb the former participants of failed plans that didn't have the government proping them up.

9/24/2009 6:14 PM  

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