Public Insurance Puts U.S. on Fast-Track to Government Control

Published in The Arizona Daily Star, May 11, 2009

The main battle in the health-reform debate in Washington is being fought over whether the federal government will set up its own health insurance plan to compete with private companies.

Democratic leaders in Congress who favor a larger role for government in our health sector are fighting fiercely to retain this "option," despite opposition from virtually all Republicans and even some moderate Democrats.

Proponents want to create a government health insurance program that would be available to working Americans and their families, arguing it would be more efficient than private insurance.

Opponents fear that it is a straight line to a government-run health system, putting private insurers out of business. Government historically has not been a fair business partner, and many experts believe the government plan quickly would become the only option available to the great majority of Americans.

So why don't proponents back away from something so fraught with controversy? Because both sides understand that it is the pivot point over how our health sector develops over the next several decades.
Rep. Janice Schakowsky, D-Ill., gave a speech last week in which she recounted a conversation with a health insurer worried about the public plan.

Schakowsky said insurers are right to fear that a public plan option will put the private insurance industry out of business and lead to single-payer.

"My single-payer friends," she told her colleagues on the House floor, "he was right! The man was right." While there may be initial assurances that the plans would operate on a level playing field, the government inevitably will use its regulatory, pricing and taxing authority to favor its plan.

Congress would give the government plan the power to dictate prices so it can artificially underprice private plans and drive them out of this one-sided "marketplace." Many people then would be left with little or no choice, as employers would drop their current coverage and send their workers into the public plan.

Research by a respected economic consulting company, The Lewin Group, shows that as many as 119 million Americans would lose or be switched out of private health coverage if a public plan were created.
This massive crowding out of private health insurance would undermine the employment-based coverage that most Americans under age 65 have today.

This violates a pledge repeatedly made by President Obama during the campaign saying, "If you've got health care already, and probably the majority of you do, then you can keep your plan if you are satisfied with it. You can keep your choice of doctor."

Once private plans have been driven out of the market, people will realize that the government plan will not be able to sustain the quality and quantity of benefits they were promised. Government instead will begin to ration care and services, driving out innovation, competition and patient-centered quality.

Labor unions are spending millions of dollars in advertising to get a public plan enacted, seeing this as a rich source of new, government-funded jobs.

Yet research shows 82 percent of Americans rate the health care they receive as good to excellent and don't want major change.

There are serious problems of cost, value and access throughout our health sector, and it is vital to address them.

But any health-reform proposal to change what needs fixing also must preserve the freedom, innovation and quality of American medical care that people value.

Like a good physician, politicians must take care to first, do no harm.

Grace-Marie Turner is president and founder of the Galen Institute.

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Published in The Arizona Daily Star, May 11, 2009

The main battle in the health-reform debate in Washington is being fought over whether the federal government will set up its own health insurance plan to compete with private companies.

Democratic leaders in Congress who favor a larger role for government in our health sector are fighting fiercely to retain this "option," despite opposition from virtually all Republicans and even some moderate Democrats.

Proponents want to create a government health insurance program that would be available to working Americans and their families, arguing it would be more efficient than private insurance.

Opponents fear that it is a straight line to a government-run health system, putting private insurers out of business. Government historically has not been a fair business partner, and many experts believe the government plan quickly would become the only option available to the great majority of Americans.

So why don't proponents back away from something so fraught with controversy? Because both sides understand that it is the pivot point over how our health sector develops over the next several decades.
Rep. Janice Schakowsky, D-Ill., gave a speech last week in which she recounted a conversation with a health insurer worried about the public plan.

Schakowsky said insurers are right to fear that a public plan option will put the private insurance industry out of business and lead to single-payer.

"My single-payer friends," she told her colleagues on the House floor, "he was right! The man was right." While there may be initial assurances that the plans would operate on a level playing field, the government inevitably will use its regulatory, pricing and taxing authority to favor its plan.

Congress would give the government plan the power to dictate prices so it can artificially underprice private plans and drive them out of this one-sided "marketplace." Many people then would be left with little or no choice, as employers would drop their current coverage and send their workers into the public plan.

Research by a respected economic consulting company, The Lewin Group, shows that as many as 119 million Americans would lose or be switched out of private health coverage if a public plan were created.
This massive crowding out of private health insurance would undermine the employment-based coverage that most Americans under age 65 have today.

This violates a pledge repeatedly made by President Obama during the campaign saying, "If you've got health care already, and probably the majority of you do, then you can keep your plan if you are satisfied with it. You can keep your choice of doctor."

Once private plans have been driven out of the market, people will realize that the government plan will not be able to sustain the quality and quantity of benefits they were promised. Government instead will begin to ration care and services, driving out innovation, competition and patient-centered quality.

Labor unions are spending millions of dollars in advertising to get a public plan enacted, seeing this as a rich source of new, government-funded jobs.

Yet research shows 82 percent of Americans rate the health care they receive as good to excellent and don't want major change.

There are serious problems of cost, value and access throughout our health sector, and it is vital to address them.

But any health-reform proposal to change what needs fixing also must preserve the freedom, innovation and quality of American medical care that people value.

Like a good physician, politicians must take care to first, do no harm.

Grace-Marie Turner is president and founder of the Galen Institute.

SHARE THIS ARTICLE

About the author