Listening to NPR this morning, I heard that the debate about the public option is now heading towards compromise, though no one is quite sure what that compromise will look like. Those on the right seem to recognize that the majority of the American people want a real public option, so are less likely to insist on the silly "coops" in each state and more likely to support a national public option if the states can opt in or out of its applicability. Those on the left, according to NPR, are less strident about insisting on a "robust" public option (mention of Sen. Rockefellar's position in this regard) and more willing to consider a national option with an opt out clause. Even so, doesn't sound like it will be a real option--in other words, it won't be something available to everybody as a choice, but only available to those who satisfy the various restrictions. Not very good as a real public option, I fear.
But for those who have been arguing against a public option based on "competition", Harold Meyerson's recent WaPo op-ed about "free market champions" is worth reading. Remember that the argument goes like this. Having a public option isn't fair because it forces private insurers (who, it is implied, do everything on their own without any government help) to compete with the public option (which, it is implied, will use tax funds to support itself and therefore be unfairly advantaged). There are several details this broad-strokes argument overlooks.
- to the extent that people are forced to buy private insurance, that forced purchase is a form of subsidy of private insurers. It is a guarantee of future business, from people who might not otherwise have purchased. It is even more of a subsidy if the premium payment is in any way made by the government in lieu of the individual.
- to the extent that the "public option" is restricted to those who cannot otherwise get insurance, it will tend not to take business away from public insurers and it will tend to take on the insureds who represent more risk (while leaving to the private insurers the (forced) clients who represent less risk--that's a form of guaranteeing gains to the private end, while expecting losses on the public end
- to the extent that the public option is restricted in what it can do (e.g., whether it can negotiate prices like Medicare or even just "glom onto" medicare's negotiated contract prices), it is not advantaged compared to private insurers
- to the extent private insurers work in markets that are near monopolies, they have no current competition, so that a public option might be the only significant competition they encounter (Meyerson notes that in Alabama, one health insurance company controls 90% of the market; the Blue Cross-Blue Shield conglomerate controls a significant share of the market).
One of the things that those opposed to the public option seem to discount is this--private companies are in the business to make a profit, the bigger the better, and they have every incentive to find ways to deny coverage. Public arrangements have an incentive to "offer[] Americans a better deal." Id.
Myerson makes an even bigger point. That the idea of a free market is one where there really is competition (not near monopoly status) and wehre products are transparent and openly comparable rather than sold "behind closed doors." In the case of health care and financial markets, it seems that the status quo big business participants are more interested in "few competitors" and "products for whcih consumers can't easily discern if they're paying a fair price". So just who is really in favor of a substantive free market operation???
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