Tonight on Market Place on NPR, I heard a story about the most amusing conundrum government is faced with as a result of Obama Care’s forthcoming insurance mandate.
As I’m sure you are aware, in another year, states or the federal government will be setting up exchanges where people who do not have health insurance will be forced to go to purchase it. As this new health insurance program is being rolled out, the happy-go-lucky, pie-in-the-sky rhetoric about WHY everyone should have health insurance is coming face to face with the very real problem of HOW to serve this new forced consumer base. It seems government has no experience running a business.
Now that the state finds itself in the business of forcing a particular good on the consumer, it’s finding itself asking questions like…
How should all the insurance options available be presented to minimize errors in coverage and help explain options that are available and how those options affect price?
How do you provide the best product and service for your consumer base?
How do you deal with presenting and marketing your products to the market in a way that minimizes confusion?
They were even talking about studies showing this and that about consumer preference – much like a modern day marketer would if faced with the same task, and how the facets will be set up on exchange website to maximize the consumer’s understanding of what they are purchasing.
So I realized that even when you have a captive consumer who must buy your product, and all the capital you need via taxation, borrowing, and printing, there are still challenges that must be overcome to effectively deliver the goods. It’s exactly in these challenges that I presume we will witness first hand the ineptitude of the state. After all, unlike a real business, there is no fear of failure on the part of the state.
Someone on the show made the statement that if we have to rely on the consumers ability to choose the “right” plan, this isn’t going to work.
Indeed, they would have customer service nightmare on there hands if people start complaining about the coverage they purchased, or find out in an emergency that what they thought was covered is not. If the DMV is any indicator of the service those frustrated people will receive it won’t be pretty.
The insinuation was that when this all fails to go down as planned, it will be the consumer’s fault. They assume that the consumer is not smart enough to make a choice regarding what will be most beneficial to themselves.
Personally I find this insulting. What they fail to realize is that it’s their own faulty understanding of basic economics that has created this problem in the first place. When a person is forced to purchase something, it should go without saying that the internal mechanism which drives the consumer to make the most advantageous choice for themselves is distorted. Force is simply not conducive to good choice making.