Is “public option” just a smokescreen?

Barack Obama made health care reform a centerpiece of his presidential campaign. But the politics of health care are never as straightforward as they appear, and what seemed like a sure thing a few months ago is now shaping up into a real donnybrook as Congress takes up an actual bill.

At the core of the debate is whether the federal government should establish a public option that would let Americans opt for federally subsidized health insurance or remain with their private insurance plan. The president argues that his plan would control costs and expand access without jeopardizing quality. But his Republican critics differ, noting that the estimated cost of the program is in the trillions of dollars and suggesting that controlling costs would mean limiting care.

Will Obama’s plan fix health care or ruin it? W a "public option" do more harm than good? Ben Boychuk and Joel Mathis, the RedBlueAmerica columnists, offer their prognosis.


Competition is good, right? The fiercest defenders of the free market — mostly the same people who oppose health care reform — endlessly sing the praises of competition and its benefits for consumers. Well, that’s what a "public option" health plan would do: Provide competition for the bloated and costly health insurance bureaucracy that leaves many Americans without any coverage.

A government-run insurance plan would have advantages over its private competition. There would be lower administrative costs, no profit pressures and a ton of leverage to negotiate lower costs from health care providers. Not only would that lower the cost of health care to more affordable levels for the government’s customers, private insurers might follow suit and provide cheaper service for their customers — a ripple effect that would benefit everybody who pays for health care.

Sure, there are dangers. The government might be so stingy with its payments that some hospitals would be forced out of business. The government might be too good a competitor and drive private insurers into bankruptcy. Or a public option plan might end up with only the very sick and very oldest Americans — the most expensive customers — that private insurers would like to drop from their balance sheets. That wouldn’t be so great for taxpayers who would end up footing the bill.

So there’s no guarantee a public option would be a cure-all for the health system. But a public plan is an excellent way to leave private insurers in place — no socialism here — while still extending insurance to the millions of Americans who currently cannot afford proper care. That’s the reason our health system needs reform. Until the Republicans — or the free market — come up with something better, a public option appears to be the best way forward.


"Government competition" is a contradiction in terms and a recipe for rationing, mandates, higher taxes and a lower quality of life. Fact is, more than 40 years of government intervention in health care has distorted the market, driving up costs and creating perverse incentives. Most people forget that the health management organizations now so reviled were the creation of Congress some 35 years ago.

The public option now under attack by Republicans would distort the market further by encouraging employers to dump their insurance costs onto the taxpayer. Why should companies continue to bear the high cost of insuring their workers when the feds can do it instead? And rather than control costs, the plan would explode them. The Congressional Budget Office estimates that the proposal that Obama and Democrats are pushing would cost more than $2 trillion over 10 years. The CBO concluded "the substantial costs of many current proposals to expand federal subsidies for health insurance would be much more likely to worsen the long-run budget outlook than to improve it." And it’s worth noting that the CBO tends to underestimate these things.

If Obama and the Congress really wanted to reform health care, they would craft a plan aimed at covering the up to 40 million Americans that don’t have insurance and one that lets Americans keep their insurance when they move from job to job or state to state. Instead, they’re conspiring to force 300 million Americans into a single-payer, Canadian-style nightmare. The cure is worse than the disease.

(Listen to Ben Boychuk and Joel Mathis podcast weekly at and