Sunday, January 04, 2009

How a Public Health Plan Will Erode Private Care

It turns out, however, that these promises cannot be fulfilled. Under the health reform plan that the President-elect has outlined, including variations of his basic approach that have been refined by Senator Max Baucus (D-MT) and former Senator Tom Daschle (D-SD), President-elect Obama's pick for Secretary of Health and Human Services, millions of Americans will indeed lose their existing coverage, and the promised premium savings are unlikely to materialize.

Tanner's observation, however, begs an obvious question: If the rules and standards, financing and benefits, reserve and solvency requirements, and consumer protections and guarantees are all the same for competing private plans and the public plan, then, logically, why should there be a public plan at all? A common set of market rules for insurers would be sufficient to achieve whatever public good is envisioned to ensure affordable coverage and fair competition. Otherwise, it would seem that the only reason to create a public plan would be simply to have a public plan--a meaningless exercise, unless the goal is public monopoly.

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