Lawmakers in Connecticut recently decided, for the third year in a row, not to create a public option health insurance plan. Gov. Ned Lamont, a liberal Democrat who once tried to oust Sen. Joe Lieberman from office for his moderation, dropped the hammer on this idea.
And good for him. Lamont doesn’t want to be saddled with an embarrassing failure that is also difficult to administer. If it has to happen, let some other sucker be the governor who deals with it.
You may wonder why they considered a public option in Connecticut in the first place. Wasn’t Obamacare supposed to fix the problems of health insurance access and affordability? That’s what its supporters promised.
But in any case, Democrats certainly have the numbers to create a public option in Connecticut if they want it. So why don’t they?
Because it’s a bad idea. A public option has never been a realistic long-term plan for government involvement in healthcare. It was always intended as an interim step toward single-payer healthcare. In the long run, it can serve as nothing else.
This is one reason Washington state’s recent attempt to offer public option plans on its exchange proved such a disappointment. Democratic Gov. Jay Inslee signed the law creating them because, as a result of Obamacare, several of his state’s counties had only one private insurer. But when public plans became available in 2020, all five turned out to be more expensive than the private alternatives, right out of the gate. Wow. Could it be that markets actually work?
In the minds of proponents of public options and single-payer healthcare, the public health insurance option inevitably creates a Catch-22 for the health insurance industry. Advocates believe that private insurers cannot deliver a profit for their investors while competing with a not-for-profit government plan unless they cheat. (Bear in mind, these people still believe, after a decade of Obamacare, that it’s the profit and not the high costs that make healthcare so expensive.)
This means that private insurers will find ingenious methods of adverse selection — imposing high co-pays on cheap drugs that treat expensive diseases (such as diabetes), “cherry-picking” and “lemon-dropping” customers, and even luring disproportionately healthy customers by offering free gym memberships. (Yes, to the Left, even that perk is considered a form of foul play.)
According to the thinking behind single-payer, the inevitable process of insurers avoiding sick and old patients will force all of the losses in the healthcare system upon the taxpayer anyway. This, in turn, will make the supposed need for single-payer evident. And with many customers already on government healthcare anyway, the public’s resistance will be sufficiently weakened to make it happen politically.
You are not wrong to think that this sounds convoluted. But proponents of the public option openly talk about it this way, so it’s perfectly fair to bring up.
There are huge holes in this narrative. As a practical matter, consider the failure in Washington state. Another problem is that public option supporters’ narrative attributes unrealistic efficacy to government. If one assumes that profit is the problem with healthcare, then why isn’t the government a superior supplier of other goods as well? Our groceries? Our entertainment? Our cars and flat-screen televisions? Could we not get all of these things from government in a cheaper, simplified fashion if we simply cut out the profit motive?
Even setting that aside and taking the issue on its own terms, the public option comes up short as a road to single-payer. For all of the flaws in the U.S. healthcare system, especially its dysfunctional pricing and payment, the care it provides to the sickest people is the world’s best. If you have cancer, you come to the United States to be treated. (Yes, Americans have worse health outcomes by some measures, but that has never been their doctors’ faults. Blame their sugar-ridden diet and sedentary lifestyles, which have been exported and are now causing a global health crisis.)
Vermont and California, not exactly hotbeds of fiscal probity or anti-government radicalism, are two examples of states that have set out to create single-payer systems, only to panic after seeing the price tag. In California, it never really advanced beyond the stage of a bad idea. Once people saw that it was going to cost twice their state’s annual budget, a number comparable to the Pentagon’s budget for defending all 50 states, they dropped it like a hot rock.
In Vermont, things got more interesting because the new government healthcare system was supposed to be implemented as part of Obamacare. In 2011, the state Legislature passed it overwhelmingly. Former Democratic Gov. Peter Shumlin eagerly signed it into law, boasting that it would “control healthcare costs, not just by cutting fees to doctors and hospitals but by fundamentally changing the state’s health care system.” But in the end, there was no free lunch, and the state had to abandon the effort in the face of the overwhelming costs of paying for care and the complexity involved in running a massive state insurance company.
Healthcare costs a lot of money. Americans eat and live unhealthily. There is a shortage of practicing doctors and other medical professionals. Doctors, surgeons, and nurses expect to be paid well for their specialized knowledge, even after clearing their massive educational debts and paying a “trial lawyer tax” on their medical malpractice insurance.
These are not problems that the state can simply step in and solve with an insurance plan, let alone with an insurance monopoly. Even liberal Democrats are afraid of further embarrassing failures, and that says it all about the public option.
