Public option query …
Three questions for those who may find this attractive (“Key House leaders restart push for public option,” Modern Healthcare.com, July 22):
1. How is this increased competition? This scheme is clearly set up to drive private competition out of the market, the result being only the government option left standing. There are already reports of insurers potentially going out of business because of the medical-loss-ratio requirements. How does fewer plans to choose from increase competition?
2. Will consumers be able to appeal rescissions and claims denials in the public option? Even if consumers can do this with the public option, who is going to check HHS’ power? And if there are fewer private choices in the market, and if HHS denies the consumer’s request in the name of the “public good,” where do consumers go? Back to what’s left of the private market? Back to my first question about competition.
3. Politicians, as well as many Americans, fail to understand the difference between “having insurance,” i.e., a card in one’s wallet, and having “access to healthcare” i.e., ability to see a doctor.
There has never been any instance in the history of economics where price controls have not resulted in reduced supply. In the case of healthcare, supply refers to the doctors. This proposed public option, as well as the current Medicare and Medicaid programs, are effectively implementing price controls.
Here are a couple of obvious results. First, doctors will—and do—refuse public option/Medicare/Medicaid patients for the simple reason that they lose money on these patients. This reduces access to healthcare.
This is not rocket science nor is there any credible dispute to this economic reality. Economic history has shown time and time again that the best way to allocate resources—in this case healthcare—and to increase the resources to be allocated (doctors and hospitals) is to enable individuals to make decisions that best suit their needs, not a distant bureaucrat. This is the fundamental difference between a managed socialist economy and a free-market economy. Ryan Hovey Minneapolis