Sunday, August 16, 2009

RIP Public Option

The Associated Press is reporting that the Obama administration is getting ready to bid the public option bye bye. While I think the public option in the form the Obama administration was pushing it was to little, too late, Obama himself viewed the option differently. Barak Obama had this to say about the public option:
one of the best ways to bring down costs, provide more choices, and assure quality is a public option that will force the insurance companies to compete and keep them honest.

But that is so one month ago!

The AP reporter provides the justification for the U turn:
Such a concession probably would enrage Obama's liberal supporters but could deliver a much-needed victory on a top domestic priority opposed by GOP lawmakers.

So that's all right then. No health care reform, but our President will be victorious. Yay!


Ian Welsh at Open Left explains the "problem" with the public option and how it could be "cured." It is so succinct I am lifting it wholesale:
To put it really simply, if you don't need a profit, and if you are only as efficient as your competitors, you will drive them out of business if you are not constrained in some fashion from doing so (capital is the usual fashion, since non profits have trouble raising it. In the health care context, arranging it so the public option takes on more unhealthy people is the more likely way to do it.)

Since a real public option properly created to not be constrained from doing so WILL drive private insurers out of business, it will not be allowed to happen. It may be called a "public option", but it won't actually be allowed to operate as a public option should. A public option which won't destroy the insurers in time, is also a public option which can't drive down prices effectively.

All else is shadow play.

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