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Why A ‘Public Option’ Will Actually Lead To Less Health Care For Everyone


The definition of success depends on the desired outcome, and who decides what is desired. According to politicians’ preferences, Nevada’s public option for health insurance will succeed. Based on what the public wants and needs, it will fail catastrophically.

State and federal politicians assert – loudly, repeatedly, and correctly – that Americans can afford neither health care, the system, nor health care, the service. The Affordable Care Act, touted to make health insurance affordable, increased the cost of coverage by up to two-thirds. In 2020, the average American family spent $28,653 on health-care costs, most of it going to insurance companies.

Last month, Nevada passed a public option bill that has been called “an experiment in what the future of healthcare might look like across the nation.” A public option is a government-run, taxpayer-financed alternative to all other forms of insurance.

Nevada lawmakers claim their plan will offer coverage costing at least 15 percent less than currently available policies within four years. Insurance companies with Nevada Medicaid contracts would have to bid their plans to be at least competitive with public option prices.

A Success for Power-Hungry Politicians

The public option (like the Medicare-for-all plan in the U.S. House of Representatives, H.R. 1384), will achieve lower costs by paying less to doctors, hospitals, and other providers. One analysis suggested a 40 percent reduction in doctors’ compensation. As government creates new regulations and agencies, more money is diverted to bureaucracy while payments to providers go down.

There is a critical difference between public option insurance and other forms of health coverage. The latter are subject to market forces; a government insurance company is not.

Government-run insurance has a supposedly unlimited source of revenue: taxpayer dollars. Meanwhile, both private insurers and Medicaid contractors live in a world governed by market forces. They either take in more money than they spend or go out of business. If they are forced to price their policies below their business costs, they must close their doors.

This is why so many insurance carriers stopped selling health policies after the ACA was passed — their fixed expenses were greater than government-mandated revenue. This is also why so many rural hospitals have closed or are in danger of closing, leaving millions of Americans without ready access to medical care.

The government insurance company or public option has unlimited income from tax revenue. It can and doubtless will engage in predatory pricing. Government can afford to price its offerings below the minimum costs others must charge to stay in business — subsequently driving all non-government insurers out of the market. Within a short time, the public “option” will be the only option available to consumers.

This is how the public option will be a great success, as judged by the political class. In fact, it will achieve quietly and covertly what Medicare-for-all seeks to achieve: total government control of health care.

A Failure for Consumers

The public option will fail the American people because of its effect on access to care. A successful, effective health-care system provides timely, quality care to patients, not simply a piece of paper with a so-called benefits package.

Both politicians and media pundits constantly conflate coverage with care. Yet they are not the same. All too often, especially with government-provided coverage such as Medicaid, insured individuals die waiting in line for technically possible but unavailable medical care. A public option would make such deaths-by-queueing commonplace in America, as they are now among our veterans and under Great Britain’s system.

Everyone knows we have a provider shortage that won’t be helped by further reducing payments to doctors. As Robert Moffitt of the Heritage Foundation testified before Congress in 2009, “You can’t get more of something by paying less for it.”

Wait times to see a doctor were unacceptable before Obamacare, with an average maximum wait time of nearly 100 days to see a primary care physician. After the ACA’s implementation, wait times increased to 176 days. With a public option, the wait could become years instead of months.

With reduced reimbursements under a public option, rural hospitals may well become extinct. What will tens of millions of Americans do, grasping government policies but with no care providers?

With the “public option” takeover of health care, physician reimbursements are not the only prices government would get to dictate. Bills are already in Congress to fix drug prices, killing the incentive for pharmaceutical companies to invest in research and development. Such a disincentive could forestall new medical miracles or rapid developments like that of Operation Warp Speed.

The public option will lead to single-payer, government-controlled health care. This is the ultimate goal and thus a success for leftists. But the public option will fail the American people, leaving them waiting in line for care that will not come in time.