Jack Kingsley recently wrote in a letter to The Daily Sentinel that insurance company profits cause people to lose their insurance. He also said that a nonprofit insurer is the only way we can afford health care reform.

In response to my good neighbor, Jack, I think that when he speaks of a nonprofit insurer, he is talking about the public option he claims most Americans want. This so called option has been touted as necessary to “keep insurance companies honest.” They say the public option should be a nonprofit, a cooperative insurance company. Mutual health insurance companies are cooperative insurance companies. They have been in operation since the beginning of health insurance.

If a nonprofit health insurance company would solve our current health care problems, why haven’t they already done so?  I also wonder what is meant by “profits causing people to lose their insurance.” Insurance is a contractual agreement and I have never seen an insurance policy that disallows benefits when the insurance company fears it will lose money. Who would buy from that company?

Thomas Sowell in his book “Basic Economics” writes that “Profits are perhaps the most misconceived subject in economics. Socialists have long regarded profits as simply ‘overcharge’…”  He goes on to say that, “The hope for profits and the threat of losses is what forces a business owner in a capitalist economy to produce at the lowest cost and sell what the customers are most willing to pay for.” Profit and threat of loss, working together efficiently allocate resources, bringing more prosperity to the capitalist economy. This is why we do not see Americans fleeing to Cuba where they can live the good life without corporate profits.

BRUCE TAYLOR
Grand Junction

This entry was posted on Thursday, November 5th, 2009 at 5:33 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.