The “level playing field” public option

If you've been following the health care reform debate, you may have heard a lot about the "level playing field" public option.  This is basically the idea of instituting rules to try and ensure that a government insurance program does not have any competitive advantages over private insurance plans.  Why would you want this "level playing field"?  To protect private insurance companies, of course?  Any other good reasons?  Not that I know of.  Here's the thing, the whole point of a government insurance plan is that it is actually more cost effective than private plans.  A government plan only needs to break even, won't spend a ton on marketing, and probably constructed would be able to keep prices down through the bargaining power that comes with big size (think Wal-Mart).  That's all good.  A government insurance plan has inherent advantages which would serve to save all of us money whether we use it or not (much like Wal-Mart drives down prices at other stores as well).  The truth is, that government is not naturally on this "level playing field" and it is just stupid to take away the natural advantages that come with a government plan to protect insurance industry profits and keep all of us paying more for health care.  It's like asking the Yankees to keep A-Rod and Jeter out of the line-up so we can have a level playing field World Series.  You don't give up what actually works.

About Steve Greene
Professor of Political Science at NC State

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