Health care in the United States is provided, for the most part, through health care providers paid by private for-profit insurers. This is not always the case. For example, Medicare, Medicaid, and military benefits (Tricare and Veterans Health) are public plans. Also, certain insurers, such as Kaiser, are non-profit insurers.
Understanding the public health insurance option requires taking a step back in time, before that modern advent of community colleges and public education, to a time when there was no "public" school option and draw some parallels. There was a time in the United States when public education was neither guaranteed and was, in fact, vilified by opponents. Today most could not conceive of a system of education where education was not "public" and a majority now consider education a fundamental obligation of government. Ohio "State" University, Pennsylvania "State" University, and so on.
Why is this relevant? Because the argument against public education (taking out the Race and Social Darwinism arguments of a bygone era) was that long-standing private institutions could never compete or exist alongside the public-supported institutions and that government had no role in education. Arguments for public education were that an educated populace is the only guarantee of an intelligent electorate and, therefore, government had a role. It was argued that competition with a broader field of students could only help in keeping costs down and standards high. Two hundred years later, most would agree that public education - and government assistance such as Pell Grants and the G.I. Bill - was a pretty good idea.
In the health care reform debate, a similar argument is going on. Reform proponents argue that only a publicly-supported insurance option - a "public option" - will result in the cost savings and fairness sought in reform.
A public health insurance plan would be non-profit. It would not be spending marketing dollars. Business owners could always fall back on the public option insurance plan if private insurance was not affordable, accessible, or available. The public plan would compete with the private insurers and that competition would level prices and prevent price gouging.
An example would be as follows. Let's say the ABC Widget Company has five employees. The owner of ABC wants to provide benefits for the workers and herself and everyone's family. She has found that providing benefits reduces turnover and creates skilled widget-makers. She looks for quotes. In the current model, there are few health insurers that would create a direct quote for a "small group" (there are exceptions including Kaiser). Brokers may be willing to help, but their costs are added into any quotes. One of her best widget makers has been on the job for years, but has developed several conditions such as diabetes that make transferring expensive and problematic.
Proponents of a public health insurance option claim that ABC's owner, if a public option were available, need only review established premiums online, calculate a commitment between her and the employees to premium, and she would have established health care insurance.
Opponents claim that the public plan will drive private insurers out of business and that it is unfair to make a private business compete with a public-supported insurance plan. Opponents claim that the plan is expensive and will become another wasteful government bureaucracy.
Today the opponents are vocal and spend significant lobbying dollars on your legislators to prevent a public health insurance option from becoming a reality. This is because the opponents are, understandably, private insurers. The donations from the insurers go to both Democrats and Republicans and some of the leading health care reform Democrats receive the highest contributions.
Because of this lobbying, there is significant misinformation as to what a public option would be or how it would work:
- Wouldn't a public health care insurance plan be "socialist" and would be akin to becoming a communist state? No. Every single U.S. Democratic and Western ally with constitutional and elected governments offer some public option and have for many, many years. And, our own system has a significant public portion including Veteran's Health Services. Finally, significant industries in the U.S. have public competition - just ask United Parcel Service or Federal Express.
- Aren't for-profit insurance companies better able to deliver health care cheaper because of the free market? No. No independent analysis of for-profit health care has established that for-profit private delivery is cheaper. In fact, just the opposite. For example, a four-year exhaustive 1997 study by the New England Journal of Medicine found for-profit care was 20% - 25% higher than non-profit or public care.
- Won't millions lose their job in the health care industry if we create a public option? Unknown. The industry, if it includes middle-tier facilitators and administrators, will see some loss of employment. But, private insurers exist alongside public insurers in many countries.
- Government can't do "insert claim here," so how can we allow yet another bureaucracy? The public option may evolve out of already existing programs such as Medicare, Medicaid, SCHIP, and similar state plans. Some of these programs extremely well run for the size of the plan.
- Is the government really going to create death camps or take away care from the elderly? No. In fact, a public option insurance plan may be the only insurer available for some of our elderly with pre-existing conditions. I have read both versions of the bills (Congress and Senate) and I would tell you if that was a part of a public plan - my grandmother is 89 this year.
If your state is like mine, insurance is mandatory for automobile drivers. If your state is like mine, there is a public insurance option or a subsidized private option insurer if no private insurer will insure you. This is similar to the public option plan for health insurance. The only entities who benefit from an employer or individual mandate for health insurance - without a public insurance option - would be, in my opinion, the private insurers you would be forced to buy from.