The 'Public Option' and Democrat Assurances

One of the more contentious issues in the health debate is whether there will be a so-called 'public option' - i.e., a government-run insurer of last resort. Health-care proponents claim it's necessary to "keep private insurers honest." Opponents claim the public option will destroy the health insurance industry. Proponents counter that this is a lie and the health care proposals in no way jeopardize private insurance - that there are safeguards to prevent this. We know that pundits on either side of a debate often lie, so which side is right this time?

This one fits a typical pattern we've seen over the years in which those on the left are the liars (yes, there are other patterns where the right is lying). The pattern is this:

Democrats push new proposal X
Republicans claim X will lead to Y
Democrats claim this is a lie and the proposal clearly prevents Y from happening
After a passage of some period of time, Y is the norm and those who continue to oppose Y are [insert appropriate anti-reactionary epithet]

Where have we seen this before? The Civil Rights Act, for one. Opponents claimed that it would lead to quotas. Proponents pointed out the act specifically bars quotas. Before we knew what hit us we had the EEOC and affirmative action was ensconsed thoughout the land, prosecuting instances of "disparate impact." Opponents are accused of bigotry.

When the immigration reform act was passed in 1965, Ted Kennedy promised Americans it would not lead to a shift in the nation's ethnic balance. Well, a dramatic shift has indeed occurred. Imagine arguing on TV today that immigration is a problem because it has changed our ethnic make-up.

Gay marriage is a recent example where the progression occurred rather rapidly. In his dissent in Lawrence v Texas, Scalia predicted* that the majority's decision to protect homosexual sex on Fourteenth Amendment grounds would lead to gay marriage being legalized. The majority scoffed at such a notion. But state court decisions legalizing gay marriage soon followed in its wake. And today, opposing gay marriage leads to charges of bigotry and can lose you your job.

So the 'public option' will absolutely lead to the destruction of the private insurance industry - it can't work any other way, no matter what 'safeguards' are put into the law. The only point of the public option is to provide a low-cost alternative to private insurance for those who can't afford the latter. "Keeping private insurers honest" means engaging in business practices that private insurers would find too costly. By definition, this will undercut the private market. The pressure to allow more-and-more people into the public option will be too great, and the floodgates will open. In a few years, when the private insurance industry starts to fall apart, proponents will point out how unfair it is that there is a private insurance market for the wealthy sucking up valuable health-care resources from the working class and that it should just be killed outright.

Now whether this is a good or bad thing is a different question - should we have a single-payer system or a private-insurance system? - I don't know. But the honest argument is that the public option will indeed kill the health-insurance industry. Come to think of it, Paul Krugman himself has argued just that.

*State laws against bigamy, same-sex marriage, adult incest, prostitution, masturbation, adultery, fornication, bestiality, and obscenity are likewise sustainable only in light of Bowers’ validation of laws based on moral choices. Every single one of these laws is called into question by today’s decision; the Court makes no effort to cabin the scope of its decision to exclude them from its holding. Lawrence v Texas, Scalia (dissent).

That this law as applied to private, consensual conduct is unconstitutional under the Equal Protection Clause does not mean that other laws distinguishing between heterosexuals and homosexuals would similarly fail under rational basis review. Texas cannot assert any legitimate state interest here, such as national security or preserving the traditional institution of marriage. Unlike the moral disapproval of same-sex relations–the asserted state interest in this case–other reasons exist to promote the institution of marriage beyond mere moral disapproval of an excluded group. Lawrence v Texas, O'Connor (concurring)