Scared of a little competition

Ezra Klein nicely makes a very key point about the public option in this post.  The opponents are ultimately afraid of it outcompeting private insurance plans.  We only have a system of government-dominated insurance market if that's what citizens choose.  Otherwise, the public option fails.  Liberals are willing to bet the public option can outcompete private insurers– conservatives are afraid to give it a chance.  Ezra's explanation:

 Liberals don't think that Congress will pass a bill outlawing
private insurance. They don't think the Supreme Court will render a
decision naming WellPoint "cruel and unusual." Rather, they think the
market will, well, work: The public option will provide better service
at better prices and people will choose it. Or, conversely, that the competition will better the private insurance industry and that people won't need to choose it.

But that confidence rests on a very simple premise: The public
sector does a better job providing health-care coverage than the
private sector. If that proves untrue — and I would imagine most every
conservative would confidently assume that that's untrue — the plan
will fail. The public option will not provide better coverage at better
prices, and so it will not be chosen, and it will languish. Indeed, if
it languishes, it will lack customers and thus lack bargaining power
and economies of scale, and get worse even as the private insurers get
better. In that scenario, the public option not only fails, but it
discredits single-payer entirely.

The liberals are willing to bet that they're right. It's not a
sneaky strategy: It's an up-front wager. The conservatives are not,
however, willing to bet that they're wrong. They're willing to say the
public option will fail, but not give consumers the chance to decide
that for themselves.

I know I could sure use another choice, public or not. 

About Steve Greene
Professor of Political Science at NC State

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