As someone who is self-employed and buys my own health insurance, I’m interested in the ongoing health care reform debate. Specifically, if the polls are true and 3 out of 4 Americans support Obama’s plan for public health care, why is there even a debate? With that level of support — and since the Dems control both houses of Congress –shouldn’t it be relatively easy to push their agenda through the system?
In particular, I’m curious if there is there a business case to support a “public option.” There must be something to it, given that every other western-industrialized nation provides health care for their citizens. Or are we simply at a point in history where developed nations understand a moral obligation to take care of their own?
Much of the debate has centered on lowering the cost of health care. By creating a government-run health insurance plan to compete with private insurers, the “supply” of insurance would be increased, which could lead to increased competition and lower cost. In theory, it sounds good but I think the reason that people are skeptical is that the government doesn’t seem to have a sparkling track record when it comes to running things efficiently.
However, there a number of other elements to the proposed plans that could increase costs. First, a government mandate requiring everyone to buy insurance would increase demand and potentially lead to higher cost if supply gets squeezed. (I love how Obama is adamant that this is “not a tax”. Let’s see, a cost imposed by the government that you have to pay… And like other taxes, low-income people would be exempt, with their costs being covered by high-earners.)
Second, eliminating the right of private insurers to choose their own customers could increase the cost for everyone. While it is dubious and wrong to deny coverage based on age or pre-existing conditions, these are for-profit companies that should be allowed to run their business how they see fit. This of course puts the burden of insuring the ininsurable on the public plan, with its costs spread across the entire tax base.
I’m interested to see how this plays out. Will the cost-savings of increased competition be enough to counteract the cost-increases of mandate, oversight, and regulation? Or, if it turns out there is no business case, perhaps the debate will turn towards the argument that health care for all is simply morally the right thing to do.
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Tags: business
