Commentary: Making the Case for the Public Option

By Paul Reitan

Buffalo, NY – Insurance protects us against big losses or expenses. Private companies that provide health insurance calculate carefully what they have to charge so that they will make more money on a large majority with low health expenses than they have to pay out to cover the costs of a few - people like me who have lived beyond their years of no or very few health problems. Of course, private companies need to have some profit left over. Private insurers fine tune their premiums - and if they can, their clientele - so that their profit will be as big as possible without premiums becoming so high that they scare people off. I'm sure you understand all this as well as I do. But it serves as background when we think about the issue of national health care legislation - national health insurance legislation - and whether a nation wide government insurance option should be included that would compete with the plans offered by private insurance companies.

Many legislators are opposed to inclusion of a government option. Why? Much of the objection, I think, is based on the idea that the government can't run things efficiently - there is always waste. So a government program, in order not to lose money, would have to adjust premiums to cover all that waste. But a government program would not have to make a profit and that would help to keep premiums down. So if a government program could control waste, could be comparably efficient to private plans, it would be able to keep premiums low and it would then be very competitive in the market place - maybe more so than the private plans, and many people, given the choice, would sign up for government run health insurance.

Of course, if a government run program involved so much waste, inefficiency, and red tape that it became unattractive, people would opt for a private plan. I'm not certain which way this would turn out, but would it hurt to give people the choice? Would it hurt to have a government option that the private insurers would have to compete with, and to have private options that would force efficiency on the government plan?

So it seems to me that a legislator that cared for the good of her or his constituents, more than - say - lobbyists, would be happy to have a government option available to compete with the private ones. Sink or swim depending on what people found met their needs best. Eventually what constituents found to be best for them and their families would be what they chose and we'd end up with a market dominated by what people found to be best for them.

So I ask again, why are any legislators opposed to a government option? Could it possibly be that some of them are paying more attention to lobbyists and special interests than they are to the interests of their constituents?

Listener-Commentator Paul Reitan lives in Amherst.

Click the audio player above to hear the commentary now or use your podcasting software to download it to your computer or iPod.