Public Option

[ChecksTheMath]

If the Public Option becomes a reality and the Industry has a new competitor to deal with i.e. The Federal Health Insurance Company Inc (FCI). then I am assuming that FCI will not have to worry about the following:

1. Commissions and Brokerage Fees
2. State Premium Tax
3. Profit
4. Having to file and deal with 50 separate Insurance Departments
5. Compliance with all the Regulations, Guidelines
6. Compliance with SOX
7. IRS & State Audits
8. Hiring Actuaries

These constitute a large chunk of change that they would not have to factor into their pricing.

So my question is. How will the Health Insurance Industry be able to compete unless the following happens:

1. NAIC finally gets its act together and centralizes (4) and (5)
2. Elimination of State Premium Taxes
3. Reduction in Commission rates
4. Smaller profits
5. Drastic reductions in administration and other costs

Even then the Industry would be dealing with a very large (Monopolistic?) competitor who will be big enough to make all sorts of deals with Providers, Drug Companies etc.

Is this the death knell of the Health Insurance Industry?

Would like to know your thoughts.