Competing with the New Public Health Insurance Agency will be like competing with the US Postal Service!

A major argument for a public option for health insurance is that it will increase competition. Does anyone really believe this? Let’s look at the track record of the US Postal Service and see how they increase competition.

The USPS is owned by the government and controlled by presidential appointees. Have you noticed that it is illegal to drop a letter that has not gone through the postal system into someone’s mail box. And it has exclusive access to non-urgent letters. It is exempt from state and federal taxes. Congress has delegated to the Postal Service the power to decide whether others may compete with it and the Postal Service has carved out an exception to its monopoly for extremely urgent letters.
The USPS Postal Inspection Service has the power to enforce the USPS monopoly by conducting search and seizure raids on entities they suspect of sending non-urgent mail through overnight delivery competitors. In 1993 the USPIS raided Equifax offices to determine if the mail they were sending through Federal express was truly “extremely urgent”. It was found that it was not and Equifax was fined $30,000.

As a quasi-governmental agency, the USPS has many special privileges including sovereign immunity (which makes it very difficult to sue when they crash into your car), eminent domain powers, exemption from most taxes, powers to negotiate postal treaties with other countries and they cannot be sued under the Sherman Anti-trust act. And they control the minimum pricing of their competitors. A letter must cost at least $3 or twice the applicable first-class rate to qualify as urgent. Does this increase competition?

Once we set up the US Health Insurance Agency what are the chances they will get this kind of special treatment?

Have you noticed that some folks get their mail delivered to their doorsteps while others have to travel miles to a community mail station? Another example of those with the loudest voices getting the most from the public trough – nothing to do with fairness, or cost of service it simply who has a congressman that will scream the loudest.

Does Cliff Clavin from Cheers really represent the average postman? I really don’t know but I do know that very few employees are ever fired from the postal service unless they “Go Postal”. It is very tough to get a job there and many folks would probably be willing to do the work for a far much smaller wage.

Proponents of this special treatment argue that eliminating or reducing the Postal Services’s competitive advantages would impact on their ability to provide affordable universal service. Does this sound familiar? This will be the same argument that is used to give special treatment to the a newly created National Health Insurance Agency.

Rural postal customers are subsidized big time. And the politics of reducing service to a remote area or closing down a remote little-used post office are enormous.

Faxes, emails, phone calls, voice mail, cell service, UPS, FedEx – are some of the competitors to the USPS. Imagine what it really cost us to deliver a letter to the boonies one at a time – and think of the carbon footprint compared to an email.

Special treatment, public employee unions, benefit packages that compensate well above the average wage – and all with bad service to boot. What if you have a letter that is very important but not actually urgent. Would you trust it to the USPS or send it via FedEx? Of course you would go with FedEx and you would be breaking the law.

Why don’t we clean up the favoritism granted to the UPSP before we create another competition killer like a Public Health Care Insurance Agency? We need new models and more competition for health care in America but creating another government “service” is not the answer.