Florida Insurers

Obama has said on multiple occassions that if you are on private insurance and are happy, he has no intention of taking that away. The state of Florida may have said the same thing when they created a state run option for hurricane insurance, no doubt to keep the private companies honest. The public option does not accurrately assess risk and therefore the premiums are lower than any private company could offer. Several private insurers have already gotten out of the business and Allstate looks to follow. Even though citizens are free to choose any insurance option they wish, they are making the correct economic decision for their households: Choosing the cheapest insurance option.

So what is the problem? People in Florida are saving money in insurance! However, since the state run plan does not assess risk properly, the plan is DRASTICALLY underfunded. If a massive hurricane were to hit, the Florida plan would not be able to pay out to its policyholders and would need a federal bailout. If the state run plan were to assess risk properly, I do not believe they could match the rates of private companies due to the inefficiencies inherent in government.

Now, think about this in terms of a public (federally run) health insurance option.