The “public plan” will be the only plan

“The ‘public plan’ will be the only plan” says health care economist Scott Harrington of the proposed government-run health plan.  Be suspicious: “public plan” supporters want it to be the only plan.

President Obama uses rhetoric of “choice” and “competition” to push the “public plan.” But he has declared his ideal to be single-payer health care, where — by definition — a government monopoly prohibits both choice and competition.

If “public plan” supporters honestly wanted choice and competition, why do they oppose policies that would make Medicaid and Medicare compete?  For example, vouchers that Medicaid and Medicare recipients can use to buy commercial insurance. Or better yet, allow taxpayers to opt out of funding these programs by getting tax credits for donations to comparable charities.

A “public plan” would not even compete fairly with insurance companies. It would have access to tax dollars, and many other advantages.  As Professor Harrington concludes, “equal competition between a government health-insurance plan and private plans would be impossible.”

If a government health “program were to be stripped of any special advantages it would cease to be a government program. It would be just another private insurer,” writes Michael Cannon of the Cato Institute.

If politicians truly want more competitive insurance markets, they should remove the tax code’s bias for employer-provided insurance, which shields insurers from competing directly for patients’ business. But politicians covet votes most. Since the biased tax code empowers unions, Democrats are not likely to touch it without giving unions special treatment.

This was published in the Boulder Daily Camera on July 4, 2009.

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