“Were we directed from Washington when to sow, and when to reap, we should soon want bread.” –Thomas Jefferson
The public option lives
House Speaker Nancy Pelosi (D-CA) unveiled an $894 billion health care takeover bill Thursday; the Congressional Budget Office puts the cost at $1.055 trillion. The bill, a combination of three separate committee bills, should be light reading for our nation’s lawmakers, though — it weighs in at a scant 1,990 pounds, er, pages.
The “reform” plan includes the dreaded “public option” that many thought might be dead and buried. The public option would create a government-run insurance plan to “compete” with private insurance. The obvious problem — at least to those who understand the free market — is that it would have several negative effects on health care and the economy. Many employers would drop their insurance coverage in favor of the small penalty paid to the federal government in exchange for putting employees on the government dole. Indeed, an estimated 120 million customers would leave private insurers. With fewer people buying private insurance, many insurance companies would increase rates, further restrict coverage, or go out of business altogether, thus creating a vicious death spiral.
Such a scenario would, of course, suit Pelosi and other Democrats just fine. They continue to condemn the “immoral” and “obscene” profits made by the insurance industry, though as it turns out, those profits are not so obscene after all, but are around 2 percent.
The public option is so unpopular that Pelosi is now trying to re-brand it, suggesting the “consumer option” or the “competitive option” as alternatives. “You’ll hear everyone say, ‘There’s got to be a better name for this,'” Pelosi said. “When people think of the public option, public is being misrepresented, that this is being paid for with their public dollars.”
Uh, Nancy, it will be. And by their great grandchildren’s dollars.
The bill will “provide” insurance for up to 36 million people by broadly expanding Medicaid and by giving subsidies to moderate-income Americans so they can buy insurance from either private companies or the new government-run plan. “Can buy” in this case means “have to buy” because of a newly minted unconstitutional mandate to buy insurance. And, the subsidies would be paid for in part with a surtax on individuals earning more than $500,000 and couples earning more than $1 million.
In the Senate, Majority Leader Harry Reid (D-NV) is working on an “opt out” provision for states that don’t wish to participate in the public option, though he’s not gaining much support. As currently written, the opt-out would cost states even more money because of the additional funding measures (read: strings) attached.
It would be similar to federal education guidelines, which states can opt out of — at the expense of federal funding — or the federally mandated drinking age states can ignore — if they don’t want federal highway money. Sen. Patrick Leahy (D-VT) pointed out last week that the federal government used to regulate speed limits, and again, states could “opt out” at the loss of federal highway funding.
It seems that Don Corleone Reid’s public option is an offer states can’t refuse.