Why We REALLY Need the Public Option

As you know, the rationale is that the public option would give private insurers competition.

Opponents of the public option say, we can achieve our goals by passing laws prohibiting private insurers from cherry-picking insureds, excluding pre-existing conditions, etc.

(Of course, if we don't include a public option, we'll also have to regulate premiums. Otherwise, private insurers will have no incentive to keep costs down – including excessive executive pay and costs due to inefficiency or fraud – and they'll just pass those costs on to us and our employers. But of course, opponents' real plan is to try defeat any meaningful regulation – i.e., to avoid any meaningful restrictions on premiums, any requirement of universal coverage unless fully subsidized by taxpayers, etc.)

What I have yet to hear mentioned is that, if we just pass a lot of new prohibitions and requirements for the insurance industry without creating a public option, we'll also need to create a substantial new regulatory apparatus to make sure the insurers comply with the new rules. And we'll all have to stay on our toes to make sure that Congress continues to fund that agency at adequate levels.

The SEC was once known as one of the most effective regulatory agencies in government. Then it was defunded to the point that it simply lacked the manpower and resources to properly perform its responsibilities. Voilà Madoff and many other disasters.

Having a public option means we won't need a new regulatory apparatus to keep watch over private insurers' every move. Instead, insurers will be inherently incentivized to create and sell insurance products that match or better the public option.

We've been told for decades that private companies are more efficient than government. I'm sure that if the real costs of a public option turn out to exceed those for private insurance, the private insurers will let us all know about it.

(And I'm sure that if the healthcare provided by the public option turns out to be as terrible as they say, private insurers won't have any trouble selling us their whole or supplemental policies.)