Over at Reason, Ron Bailey has a great article on Obama’s push for health care reform. In his weekly radio address on Sat. Obama repeated his goal that “Americans should have the choice of a public health insurance option operating alongside private plans.” During the campaign, Obama said time and again that “nothing would change” for people who liked their current plan. But, as Bailey points out, introducing a public option would have dramatically affect the health care market:
The best result of creating a parallel public insurance scheme is that the United States would end up with an explicit two-tier medical system in which privately insured Americans have better access to better medical care. Such two-tier health care systems already exist in countries with national health care schemes such as the United Kingdom and Germany. In the United Kingdom, more and more Britons are opting for private health insurance instead of remaining with that country’s National Health Service. Privately insured Americans would get higher quality health care, but because the market for medical innovation would be smaller, everybody will get worse care than they would otherwise have received had most health care not been nationalized.
The worst case scenario is that the public option plan would eventually absorb what remains of the private health care system. This could happen as the political constituency for private health care and insurance shrinks while more and more Americans become covered by government insurance. In addition, it will be hard for politicians to resist forcing wealthier patients to join the government plan as a way to make up for eventual shortfalls in revenues.
Neither option seems that fab. More here.