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.

Public Option does not increase competition required to lower costs

Today the Senate Finance Committee will be debating several amendments that contain a public option. Sen. Charles Schumer (D-NY), while debating Sen. Rockefeller's (D-WV) public option amendment, stated that the only way to achieve competition in health care is to institute a public option. During the debate the liberal Democrats referenced a chart that showed that competition does not exist right now as health care insurance companies, roughly 75%, hold a monopoly or an oligopoly in the states they operate. I agree that more competition is required to drive down cost. Where I differ, as do moderate Democrats and the majority of Republicans, the public option does not foster competition. Before my progressive friends "jump the shark", hear me out.
The trouble with the logic of a public option leading to competition is that adding just ONE additional plan does not break the oligopoly. If you have two plans offered and add one more plan, how does that increase competition? Yes it does offer another option but an oligopoly still exists. To break out of the monopoly or oligopoly trend across America, in regards to health care insurance, needs more than just one option. That being said, why are liberal Democrats lack the understanding on how to breed competition? To create the competition, as I said in what I'd suggest for health care reform, is to open the state borders.
Allow everyone in the United States to purchase health care insurance from any state in our nation will create the competition that is required for drive down the cost of health care premiums. The public option will lead to less competition. Now the public option will not act like a light switch to the private insurance programs; rather it will act as a dimmer switch. After the public option is established and running, American's will lose their current insurance program.
Democrats floated the notion that the Mayo Clinic came out in favor of a public option that is similar to Medicare. This claim was false, http://healthpolicyblog.mayoclinic.org/2009/09/23/mayo-clinics-position-on-the-public-option/, as the Mayo Clinic blog states, "If the "public plan" means a government-run, price-controlled, Medicare-like insurance model, we do not support it because it has been shown over many years that such a model has not controlled costs and had punished doctors, hospitals and others that provide high-quality, affordable care." Just a few days ago the Mayo Clinic reported, in the Star Tribune, which lost over $730M is medical costs of Medicare patients. Now, where does a hospital/clinic, like the Mayo Clinic, going to make up the lost revenues? It falls on the shoulders of those with non-government run insurance.
Sen. Debbie Stabenow (D-Mi) just claimed that, per the CBO, only 25% of those without insurance right now would opt into the public option. The popular of given of those uninsured is 48M people. Based on Sen. Stabenow, per the CBO, we are looking at 12M people. In a system that already offers health care for, roughly, 178M people how will we be able to ensure "real competition and choice" as Sen. Stabenow just said when it only affects 6.7% of the market? Any ration person understands that adding 7% to anything is not creating competition or big enough of anything to mix the overall pot. If the ultimate goal is to offer choice and to reduce cost of premiums to Americans then Congress needs to move in the direction of doing so by making health care insurance available interstate. By going interstate it will increase commerce as states like Iowa, as Democrats claim, has only 1 insurance option will be able to purchase insurance in other states and it will allow health care insurance providers to enter into more markets.