Health care reform is heating up in Washington, and a lot of old, bad ideas are being recycled as fresh, progressive change. Senator Ted Kennedy (D-MA) has drafted a plan which transfers enormous regulatory power over health care -- power that was traditionally exercised by states -- to Washington. In fact, many liberals intend this “public plan option” as nothing more than a back-door approach to a single payer, government-run health care system.
The “public option” would be a new health plan offered by the government. Supporters claim this new plan will “compete” with private insurance plans. But there is no such thing as a fair competition when the government is both a competitor and the referee. In reality, the public plan -- buttressed with taxpayer subsidies and favorable regulation -- would increasingly crowd out existing private health care options, paving the way for a health care system subject to greater government control.
Under the Kennedy proposal, and its new public option, here is how the “competition” might fare:
- The public plan, with unfair advantages, will be able to offer artificially low prices. While the new public plan might be portrayed as only an alternative option to private insurance, the government will invariably use its powers to favor the public plan. Congress, with its regulatory, pricing, and taxing authority will have the power to artificially under-price the public plan, making up the difference using taxpayer dollars or by paying doctors and other health care providers less, eventually pushing private health care options out of this allegedly competitive market.
- The absence of a level playing field would cause millions of Americans to lose the private coverage that they have today. Private plans would be unable to compete with a new public plan receiving unfair advantages, leaving many Americans with little or no choice in their health care options. As many as 120 million Americans could lose the private coverage they have today because the public plan would significantly undermine the current employer-based system of private health insurance.
- Americans are left with one health care option -- the public option. With private plans driven out of the market, the public plan "option" would become the only "option" for many Americans. The plan’s costs will soar, and the government will have to raise taxes significantly or limit access to health care goods and services. This not only would compromise access to high-quality care for many Americans, it would spell the end of private competition and innovation in the health care sector.
The Heritage Foundation has produced a handout with facts on the public plan “option.” We encourage you to send it to your friends and family so that they too can learn about this gateway plan to government-controlled health care.
Also, be sure to visit our new website on health care policy at http://www.fixhealthcarepolicy.com/.
Thank you for your support of The Heritage Foundation during this critical policy fight.
Edwin J. Feulner, Ph.D.