Why the Public Option for Health Care is Dead and Should Stay Dead

One of the features of health care reform or Obamacare is the "public option", essentially a kind of Medicare for everybody that would "compete" with a private health care insurance program. The public option has proven to be very unpopular.

A close examination of what the implications of the public option reveals why it has proven unpopular. President Obama and his associates defend the public option by saying that it is a means to spark competition with private insurance programs, forcing them to lower prices.

The problem is that there are already about 1300 private insurance programs in the United States, so competition should not be an issue. There are indeed better ways to foster health care insurance than to create a new government program to compete with the private sector.

One could, for example, allow the purchase of health care insurance across state lines. Proponents of Obamacare are correct that there are some states, such as Alabama, where one or two private insurers have a dominate market share. But the answer would not seem to be just adding a Medicare for everybody. The answer might be instead to allow access to all of the rest of the 1300 private insurance plans that exist in other states.

Another idea advanced by John Goodman, head of the National Center for Policy Analysis, is to allow people enrolled in current government health care programs, such as Medicare and Medicaid, to instead accept a voucher to purchase a private plan instead. Even more radical is the idea of decoupling health care insurance from employment and allowing people to purchase health care plans in the same way as they insure their cars and homes.

But the idea of a public option is not, honestly speaking, to foster any kind of competition, but to stifle it. While President Obama maintains that the public option would be self financed through premiums, this claim is not credible. Inevitably the public option would be tax payer supported, slowly but surely pricing private health care plans out of the market.

And that leaves people with one, big, government run health care system, as exists in Canada and Great Britain. And with it will come the usual features of government run health care which include long lines for procedures, sub standard care, and corruption as the rich and connected use influence to get health care that will be denied everyone else.

It is no wonder, therefore, that despite the wishes of President Obama, the public option is all but dead. The problem is that health care reform cannot pass with the public option and it cannot pass without it, according to various whip counts that have been published in the media.

And all things considered, that may be all for the best.

Sources: The 'Public Option' Health Care Scam, Steve Chapman, Reason, July 16th, 2009