I posted the following comment to this post by Robert Reich on his blog:
You wrote "There's no way to push private insurers to become more efficient and provide better value to Americans without being forced to compete with a public option".
But what about the insurance companies competing among themselves, does that not count as real competition? Everyone keeps talking about this need for a public option to provide competition for the private insurers, implying that currently there is no competition at all (or not enough anyway), which just doesn't seem to be true.
Why does the government have to go to all the trouble of starting and managing a public option health care plan just to engender competition? If honest competition is really what is desired, wouldn't it be better to change regulation and laws to create a better, more equal playing field on which private insurers would need to compete? Isn't that really the core role of government, i.e. to set up the ground rules under which commerce proceeds and enforce them?
Greg Mankiw made the good point in a NY Times piece he did in June ("The Pitfalls of the Public Option") that, if the public option really were to not enjoy any special advantages (e.g. tax funds, other subsidies, etc.) over private insurers, as its supporters claim, then there is nothing stopping anyone from creating such an option right now --- it would simply be another non-profit health insurer. Do you not agree with this? Or are you just being disingenuous (i.e. "yes, of course, the public option will enjoy benefits that the private insurers don't, eventually driving them out of business --- that's the whole point and the roundabout way we get to single payer! But we can't say that out loud and we must respect current political realities to get there.")
Please tell us, what is different about the competition we would get from a public option versus the competition that the private insurers are giving us?
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