If you live in Lewiston-Auburn, or Aroostook County, odds are that you’ll find either a leaflet, or a person, on your doorstep advertising a “public option” for health insurance. Don’t be alarmed if or when you do.
The idea is not that scary.
A public option is a government-run health insurance program to compete with private insurers. If this sounds like socialized insurance and contrary to capitalist principles, don’t listen. It’s a market-based solution, albeit with a big bump from the public sector.
Creating a strong, well-funded, transparent and affordable public plan could become the driving competitive force needed to reform private insurers. A public option, essentially, would be a benchmark. If private insurers could do better, then they should.
This represents the essence of capitalism — the cutthroat competition for customers. That one party happens to be government should be immaterial. Consider instead that health insurance is immune to traditional market forces, both in practice and in principle.
Here’s an example: We supported interstate sales of health insurance policies; Maine lawmakers opposed them. They argued that insurers — if given access to this market — would only want healthy, low-risk clients, while leaving higher-risk customers to government plans.
This would have happened, because there’s profit in lower-risk patients. Yet the profit motive does little to aid the availability, access or affordability of insurance. This is why insurance might be immune to the market – pursuing profit and, arguably, make things worse.
Yet it’s also true that policymakers have resisted market-based solutions to insurance. Many decent ideas — such as interstate sales — have not had the chance to work.
It is a paradox. Neither the government nor the market alone can fix insurance. What is the solution? It might be a public option, one which can make insurance more accessible, while also pressuring and encouraging private insurers to compete on more populist terms.
The catch, however, is that a public option must be viable. If it’s a flawed design, as Dirigo Health might be, there’s little incentive for private insurers to compete. On the federal level, a public option must not compromise on care, while finding new avenues for containing and controlling costs.
It’s no easy task. But it is also no impossibility.
Mainers, by virtue of their senators, will hear much more about public option plans in the future. There will be plenty of promises and projections, by proponents and opponents and everyone in between.
Our advice? Keep an open mind. A public option has merit.
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