Ducks Mahal

Fox news has the hen house surrounded and there’s going be yolk on the carpet when we get there.

The Little Woman is a Nielsen Rating TV viewer lab animal.  She documents our viewing for Nielsen and as it turns out our TV viewing consists mostly of science, history and how someone survived a 12 hour surgical procedure.

For our news, we have divorced and all but forgotten CNN.  We think what did it was the bias turned full force for the Obama campaign and full force against Palin.  We knew Palin wasn’t going to add up to much in the election, but the relentless attacks on her and her family soured us on CNN.  The cast of characters in the recent political theater has us drawn to Fox news for now.  But, Fox is also headed down the road to divorce court if their extreme right wing-isms don’t chill a little.

The boob-head comment for me this week came from Hannity.  He asked a caller, “Don’t you think market competition is a good thing for insurance companies?”

Well, the answer is there is no such thing as a market in prefect competition for insurance companies.  Auto insurance for example consists of a short list of dominant players.  It is highly regulated and rates cannot be raised or lowered without state commissioner approval.  The health insurance market is in the same fix.  It isn’t like selling refrigerators.  The insurance market is an oligopoly (cartel).

The issue on preexisting illness is a huge one and a great example to understanding the reality of insurance.  Feature, Hurricane Katrina is blowing off your coast.  You realize you have no coverage.  You call the cheapest agent and bind coverage days before it lands.  After the hurricane passes you cancel your policy.  Same with health care.  I know exactly what I’d do.  I wouldn’t buy coverage unless I knew I was sick.  If everyone did that, we would run out of coverage fast.  Insurance isn’t like a car or a refrigerator.  No one really uses it unless something bad happens.

There is the other evil stepbrother side of insurance having to do with any utility like electricity or gas, which insurance is.  When a household expense becomes compulsory, it demands intense regulation and oversight.  You have to buy compulsory minimum auto liability in every state.  You have to buy collision and comprehensive if you have a car loan.  You have to buy homesowners insurance if you have a mortgage.  You have to have healthcare unless you feel you can self-insure.  You are lucky if you only pay $100 or less a month into your plan at work.  Try paying $4,500 a year like I do for 75% of the cost of the bills that are covered and a $5,000 yearly deductible upfront.  When anything becomes compulsory, it doesn’t fit the free market system definition.

Warren Buffet should know when he says it’s all about cost containment first.  He owns Geico.  Insurance is the biggest and goofiest mess of paper you ever saw.  Twenty percent of your premium goes to paper pushing for no real good reason.  There are reasons, but few are good.  Then there are the lawyers who sue for damages and take 30-to-40% of your award for doing nothing more than standing in the way.  You get a lawyer; the adjuster adds up your bills and when it is over, you get way less than you would have had you come alone to the table.  At the end you have to pay the attorney.  That’s what tort reform does.  You pay 15% more for auto insurance b/c Americans favor the eye-for-an-eye approach to liability coverage.  That’s why I have always favored no fault.  It takes all the cost of blame out of it.

Let me tell you, forget the Foxes, there is an elephant in our living room when it comes to insurance, not just health care and we choose to ignore it and walk around it.  All insurance needs to be fixed, not just healthcare.  Market competition is not going to fix it.  Government doesn’t need to run it, but it needs to step in.