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Last Updated Sep 2009


The public option’s premise

By John Potter

September 22, 2009

The healthcare debate has taken over the public consciousness.  
 


Accusations of death panels, belligerent town hall meetings and depictions of President Obama as Adolf Hitler have epitomized the summer recess for Congress. The most controversial portion of the health care debate is the notion of a public option.          
 


Opponents of the public option believe that it will lead to private insurance companies being run out of business, and eventually the collapse of health care in America.  
 


 

Bill O'Reilly even goes so far as to say that the public option for healthcare is just a way for President Obama to push his socialist agenda. Nothing can be further from the truth. If anything, it would bolster the private sector by making it more competitive.        
 


The best supporting argument for the public option is found by examining the shipping industry in the U.S. At this moment, we have a mixture of private and public options for shipping. The major private companies of the shipping industry are FedEx and UPS with the public option being the United States Postal Service.           
 


As you can easily see from looking up the two private companies financial reports, while they are struggling due to economic conditions, they are far from being run out of business. UPS posted a $2.1 billion profit in the last twelve months. FedEx posted a $98 million profit over the same time period.           
 


What about the public option for shipping? Well, the USPS seems to be having a tougher time with things. They posted a $2.8 billion loss at the end of the 2008 fiscal year. I doubt FedEx and UPS are worried about being run out by the beleaguered USPS.      
 


If the government can't run a shipping company, why should it run a public option for health care?  
 


The public option would work as a price control on the private sector. To continue the analogy, without the USPS it would fall heavily on FedEx and UPS to ascertain the "fair market value" for shipping.             
 


 

The government needs to play this role because insurance companies lack competition under our current structure. This point was recognized by conservative John McCain during his presidential campaign.  

 
McCain acknowledged that insurance companies only really compete within a given state under our current system. This is because it is illegal to buy an insurance policy over state lines.            
 


 

Our current system embodies a failure to adequately compete in a market economy, and a substantial force behind the high cost of health care in this country. The public option represents the best fix to the lack of competition between insurance companies, because it would signify a national standard for the cost of healthcare.  
 


With that in mind, it becomes clear that this isn't about converting the U.S. into a socialist nation, but about fixing a broken insurance system.              


Don't really see the problems with the current system? Consider that the U.S. Census Bureau reported that in 2007 there were 45.7 million Americans who were uninsured. Consider that the Kaiser Family Foundation calculated that the average cost of premiums for employer-sponsored family coverage was over $13,000 a year.  
 


 

Something clearly needs to be done, and the public option exemplifies the best option for combating the current turmoil.

 

Recent Comments
Communist.
From: Adam S
9/22/2009 4:31:08 PM

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