Proponents of a public healthcare option argue that we need to add a public option in order to promote competition in health insurance markets and make health care affordable for Americans. The City of Sacramento claims that “For-profit health care hurts us all” and just passed a resolution supporting federal Medicare for All. But does for-profit health care hurt us?

For-profit health care hurts us all.
The City of Sacramento

Mostly false or misleading. Significant errors or omissions. Mostly make believe.

This is mostly false or misleading because the problem with our health system isn’t profit, but a lack of choice, transparency, and affordability for patients. While the current healthcare system isn’t perfect, it’s far superior to a public healthcare system, whether that’s Medicare for All or a watered-down stepping stone policy: the public option

The healthcare system of today is funded by a mix of private and public healthcare dollars. Myriad federal government programs already exist to provide coverage and services for seniors, low-income people, children, veterans, American Indians, and others. Medicare and Medicaid together already cover over 40% of all Americans.

Furthermore, the Affordable Care Act funnels subsidies into private health insurance via state-based “exchanges.” While the system we have today (for those not covered by government programs) is technically private, and there are for-profit elements, it is not free-market. It might be considered cronyism or a highly regulated or government-managed system (but not yet completely government owned or funded). The exchanges have struggled to be competitive. In 2018, 26% of consumers in the exchanges had only one plan available in their geographic area. This has been improving, slowly, but still represents a challenge. 

To enhance competition, some support adding a public option. But, as the latest policy focus from IWF explains, a public option would replicate some of the problems that already exist in existing public programs. Namely, those programs are not fiscally sustainable and do not offer patients the best access to care because they reimburse healthcare providers poorly. People who have private health insurance actually have better access to doctors and hospitals. And part of the high cost of private health insurance is due to the fact that hospitals charge private payers more to recoup their costs associated with treating Medicare and Medicaid patients. Private payment is critical to the U.S. system; it doesn’t hurt us all. Quite the contrary. 

The system that really would “hurt us all” would be the abolishment of private insurance, which is the ultimate goal of those who favor Medicare for All. Sadly, many Americans do not see how the public option — which sounds like a middle measure — would ultimately lead to single-payer.

Read more here.