Wednesday, September 30, 2009

Public Option fails twice

The Senate Finance Committee heard two different amendments yesterday that both called for a public option. Sen. Rockefeller's amendment fell failed to win majority support with Sen. Baucus (D-MT), Sen. Conrad (D-ND), Sen. Nelson (D-FL), Den. Carper (D-DE), and Sen. Lincoln (D-AR) joining the Republicans on the committee in voting 15 to 8 to reject the amendment. The other public option bill was offered by Sen. Schumer (D-NY) that was also rejected, 13 to 10, with Sen. Baucus (D-MT), Sen. Conrad (D-ND), and Sen. Lincoln (D-AR) joining Republicans in opposition. The main difference between the two proposed amendments was Sen. Rockefeller's bill set rates for the first two years at Medicare rates and then negotiated them afterwards where Sen. Schumer's amendment established rates by negotiating right away with doctors and hospitals.

During the debate on both bills the Democrats seeking a public option raised the point of competition and believes that a public option is the only method to ensure "fair" competition. The trouble I see with this logic is the government cannot establish a "fair" playing field if they are player and regulator. Sen. Grassley (R-IA) concurs with, "Government is not a fair competitor. It's a predator." Naturally the premiums of a public option will be less due to the lack of overhead but the missing element is funding. With low cost, premiums, option to people and businesses, we will see more opt for such an option thus increasing the amount of funding required to sustain. The new required funds will either come from higher taxes or premiums. Either way it will not be good for Americans and ultimately not achieve the goal of driving down health care costs.

If Democrats are serious about competition, I hate to sound like a broken record, then all for interstate health care insurance programs to exist. As I said yesterday, during the debate the Democrats referenced a chart that displayed the monopoly and oligopoly that many insurers experience in the vast majority, over 70%, of the states. So, to eliminate the monopolies and oligopolies currently instituted is best accomplished by opening up competition between states. Adding just one more option, public option or CO-OP, will not achieve the necessary additional competitive forces required to drive down premiums. Why does Econ 101 come into the minds of Congress? Perhaps it is because the vast majority of them are lawyers and have not worked in the private sector.

Sen. Rockefeller frustration boiled over, during the conversation with his amendment, when he pleaded that, "the public option will be optional. It will be voluntary. It will be affordable to people who are now helpless before their insurance companies." The trouble Sen. Rockefeller is that it will not be optional in the long run as companies will discover it is cheaper to kick in the penalty than to offer insurance benefits. Plus, a mandate that stipulates that all citizens of the United States must have health insurance eliminates the voluntary aspect of any option let alone the public option.

Although Sen. Baucus voted against both amendments he did say, "There's a lot to like about a public option." I do not see anything to like about the public option. The public option will only grow the size of government and enable lazy Americans that feel government is the answer. In addition, the public option will not breed competition which I have clearly stated above. Why do we, as Americans, continue to allow such an argument to be made? Someone please show me how adding a public option increases competition!!!!!! If no one can, please join me in requesting all in the debate on health care to remove this argument that a public option will increase competition.