By Matt Hawes
In a Politico piece out today, the Competitive Enterprise Institute’s John Berlau and Jonathan Moore point to the bailout and subsequent practices of AIG as an example of what a public option in health care could look like in the marketplace.
Since September 2008, the government has infused billions into an insurer that provides coverage for cars, homes and business assets. Once this insurer got government funding, it began slashing premiums for many of the insurance policies it sells. Its private-sector competitors have cried foul, but new customers keep signing up.
Chances are that most readers have heard of this insurer – just not referred to as a “public option.” Rather, it is known by its initials: AIG.
Though the primary argument for the government to pour more than $180 billion into American International Group’s coffers was to save the financial system from the company’s bad mortgage bets, the infusions have given the company an advantage over its rivals in its daily businesses….
AIG cut premiums by 34 percent, for example, to underbid three other firms and win renewal of a policy with the U.S. Olympic Committee, the Journal reported. It pried away a rival’s contract covering the city-owned airport in Mesa, Ariz., by bidding about 30 percent less. The company assuaged concerns about safety and soundness by pointing directly to the government infusion that, it says, “strengthens [AIG’s] capital positions.”…
The Government Accountability Office and the insurance department of Pennsylvania are investigating whether the company has been charging inadequate amounts for the risks involved in its policies since it received bailout money…..