The left keeps arguing that a “public option” (more accurately a “government option”) is needed to compete with the “greedy” insurance companies that, as reported by the Associated Press, posted a whopping 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. Putting this aside if a government option where the way to create competition in a free market, why don’t we have a government option in other industries like cars, for example. Oh wait, there is General Motors. Or how about banks. Ooops. TARP. Except in these cases the government stepped in to stop these companies from failing not to create competition. No matter the rationale the common theme is that there is no limit to Obama’s drive to expand government control over our lives.
Robert Samuelson wrote an excellent piece in the Washington Post explaining how the government option is not what it appears to be. His conclusions:
The promise of the public plan is a mirage. Its political brilliance is to use free-market rhetoric (more “choice” and “competition”) to expand government power. But why would a plan tied to Medicare control health spending, when Medicare hasn’t? From 1970 to 2007, Medicare spending per beneficiary rose 9.2 percent annually compared to the 10.4 percent of private insurers — and the small difference partly reflects cost shifting. Congress periodically improves Medicare benefits, and there’s a limit to how much squeezing reimbursement rates can check costs. Doctors and hospitals already complain that low payments limit services or discourage physicians from taking Medicare patients.
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By contrast, a favored public plan would probably doom today’s private insurance. Although some congressional proposals limit enrollment eligibility in the public plan, pressures to liberalize would be overwhelming. Why should only some under-65 Americans enjoy lower premiums? In one study that assumed widespread eligibility, the Lewin Group estimated that 103 million people — half the number with private insurance — would switch to the public plan. Private insurance might become a specialty product.
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