Senior Senate Finance Committee member Charles Schumer (D-NY) has vowed to “ignore” all health care overhaul legislation that does not include plans to create a government-run health insurance plan, or “public option,” and have it compete “on a level playing field” with private insurance plans.
“Schumer understands clearly the implications of the so-called public option,” said Paul Gessing, president of the Rio Grande Foundation. “While he claims that there is an even playing field, there is no such thing when one entity can forcibly extract money in the form of taxation and faces no pressure to turn a profit.
“He is astute in urging for the public option because all of the other issues are superfluous,” Gessing continued. “Eventually and inevitably, the public option will lead to the federal government being the dominant player in health care.”
‘Swamp of New Bureaucracies’
“Under a public plan, the government would squash its competition—private insurers,” said Devon Herrick, Ph.D., a senior fellow and health care economist at the National Center for Policy Analysis. “Further, such a program could well come at an endless cost to taxpayers.”
“A public option, actually a swamp of new government bureaucracies, ready from ‘day one’ for perpetual taxpayer bailouts, would certainly squeeze the profits of private health providers,” said John R. Graham, director of health care studies at the Pacific Research Institute.
“It is dead easy for government to squeeze profits,” Graham said. “But that is not a valid goal of health reform. A valid goal is to squeeze the profits of providers who fail to satisfy patients’ needs, and allow those who do to earn increased profits. Patients are capable of doing this, but government is not.
“Advocates claim that the government would have economies of scale larger than private insurers,” Graham continued. “No doubt it does, but it also has massive diseconomies of scale that far outstrip its advantages. That’s why we would never let the government set up a public option for groceries, housing, or clothing. We all know that it would fail to provide quality or choice.”
At press time neither the Senate Finance Committee nor the Senate Committee on Health, Education, Labor, and Pensions, which are working on parallel overhaul proposals, had finalized their respective bills.
Aricka Flowers ([email protected]) writes from Illinois.