Ending Insurance Slavery

Insurance is one of the largest direct costs we all pay. Insurance costs us money directly from our pockets, and insurance increases the prices of everything we buy. Most of us work several years of our lives full-time just to pay for insurance. Still, the cost of insurance continues to increase and we do not always get what we pay for.

First, let’s look at why insurance costs are so high. Then, let’s look at two ways we can reduce insurance costs to the minimum in Florida. This can save each of us thousands of dollars per year, and it can save our state budget hundreds of millions per year as well. It can mean years of freedom for each of us “insurance slaves” in Florida.

Insurance costs so much because:

1. Many different insurance companies are involved. None of them offers all of the different kinds of insurance (health, life, auto, homeowners, professional and business, long-term care, retirement, etc.) and there are wide price differences between the providers.
2. Each company has its own organization and operating costs, which also increase constantly.
3. Each company is driven to make the maximum possible profit on each quarterly report.
4.  Because of (3), insurance companies invest in speculative projects that makes them lose money, so they need to raise rates.

As governor, on my first day in office I will invite every insurance company that does business in Florida, or wants to do business in Florida, to send an officer to a meeting in Florida with our Insurance Commissioner and me in January, 2011. We will represent all Floridians, and negotiate as 18 million combined customers.

At that meeting, we will suggest to these companies that they create a consortium in Florida, sharing common applications, service codes, paperwork, billing and other overhead costs. To qualify, each insurance company must:

1. have a good record of customer satisfaction;
2. pass a financial exam to verify that its assets are not based on phony derivatives;
3. guarantee that no one will be excluded from coverage;
4. guarantee prompt payment to service providers like doctors, so we don’t get more senseless costs due to providers chasing their money.
5. to participate, each company must reduce the rates in Florida by at least 30%.

This will open the marketplace to more competition, which can drive down costs as well. Working with our local insurance agents, we can choose the providers with the best coverage for our needs at the lowest costs, at least 30% less than we pay today.

In addition, we must be sure that coverage of drugs and home care is available, where not covered by Medicare and Medicaid.

If the insurance companies will not comply with our demands immediately, then we as the people of Florida will do it ourselves. “Citizens” is a good start, but serves much too small a market, concentrating on high risks and leaving the profitable business to the insurance companies. We can’t consider “Citizens” as comparable to what we are doing here, across the board.

By acting as a unified buying group of 18 million people, we can buy insurance “wholesale” or underwrite it ourselves. We can have our own insurance company that will offer the lowest rates in each category of insurance, particularly automobile, homeowners and health insurance. This will force the other insurance companies to get their prices in line or lose a huge part of their business (we are 6% of the United States population, after all).

If we must create our own insurance company, each of us will save thousands of dollars per year, and our state budget will save hundreds of millions per year as well.

Common sense says that 18 million people together are much stronger than 18 million people each negotiating for insurance alone.

Think about how much you would save if your insurance costs were reduced by 30%. How many less years would you need to work, just to pay for insurance?