Confronting The Socialists Halftruths

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In a profit driven system, there are substantial incentives for administrative build-up. Insurers invest millions in trying to deny their clients insurance. They hire investigation agencies to follow their clients around to see if they're actually hurt. They sue whenever they think they might be able to convince a court not to support their denial of claim. The most important issue, however, is that there are literally thousands of these companies doing the same thing. This is why administration costs are so ridiculously high.

Quite frankly, the issue of "Insurance companies fighting to deny coverage" is a myth. Does it happen? Absolutely, but nowhere near the amount that people reading Grisham novels want to believe. Remember that in a competitive market, quick and fair paying of claims is a huge factor in where agencies and insureds will place coverage.

Now, I can't speak to healthcare coverage, because I am in the P&C business, but I can tell you that what DOES happen a lot of the times is that people will assume they have coverage for things that they do not, and then seek to reclaim those costs. That's more a function of not reading their policy than insurance companies trying to "screw" their customers.

And again, I feel the need to remind you that very rarely will you have lawyers directly under the employ of an insurance company. Insurance companies will generally contract panel councils, and many insurance companies use the same law firms.

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This seems to be a uniquely American problem. Unless changes are made to your legal system, its unlikely that this would ever be solved under any system.

I absolutely agree with you, which is why I suggest that a big factor in removing these costs is to modify the way that torts are handled.

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This, however, does not change the fact that administration costs would fall substantially if you switched to a single-payer system.

Of course it does! Same population will, generally, require the same amount of manpower to file claims, determine scope of coverage, underwrite, etc. All you'd be doing is bring it under one umbrella. 10 underwriters doing the same amount of work is going to cost the same whether they are working for 2 companies or 10.

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You wouldn't have near as many lawyers or near as much administrative redundancy.

The only reason that the number of lawyers would reduce is if the number of suits is reduced. I don't see how nationalizing this will decrease the number of claims in the slightest.

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I'm not talking about insurance claims, I'm talking about lawsuits.

Um, in liability coverage, lawsuits ARE claims. Lawyers are almost exclusively dealt with through a claims department.

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Everyone in America with a brain knows that they need some sort of socialized, universal health insurance system

Excuse me? Did you just suggest that I don't have a brain?