Why We Must Keep Up the Fight

(AFP Arizona Analysis, August 19)

In speeches over the last few days, President Barack Obama has appeared to be backing away from the Fannie Med Public Option. That’s an important victory, and one that is largely attributable to the amazing groundswell of grassroots opposition in recent weeks. As Charles Krauthammer and other commentators have acknowledged, pro-freedom grassroots efforts have been a game-changer in the policy debate over how to reform health care.

However, Obama and his allies only appear to be backing away from the Fannie Med Public Option. They are still committed to a Washington takeover of the private health insurance marketplace. Look at two main scenarios that are still under consideration on the left side of Congress:

Scenario A: Government-Created Co-Ops

Under this scenario, the national government would provide the start-up funding for nonprofit national insurance co-ops. This sounds different than the original Fannie Med Public Option, but the Co-Ops would be able to offer unrealistically low premiums and unrealistically lavish benefits, because their managers will know that the national government will be under intense political pressure to bail them out with taxpayer money when they start to go under. Meanwhile, Americans will be herded by individual and employer mandates into signing up for the private insurance plans that qualify for the national Exchange. Then, the Exchange plans will be increasingly burdened by new coverage mandates that will make it increasingly difficult for them to offer low-cost insurance alternatives. That means the Co-Ops will function much like the Fannie Med Public Option: they will be propped up by taxpayer money and will eventually crowd out most of the private options. With nearly everyone in the Co-Ops, and with the Co-Ops dependent upon Uncle Sam’s money, Congress and the health care bureaucrats will soon be under financial and political pressure to “bend the cost curve” downward by rationing health care for tens of millions of Americans. The questions about what is covered and what is not covered by insurance (which to some extent is a question of who lives and who dies) will be decided by a Health Care Advisory Committee, a Health Choices Commissioner, and by Congress.

Scenario B: No Co-Ops, Just Heavy Mandates

Under this scenario, the national government would not set up Co-Ops, but it would still use individual and employer mandates to herd most Americans into signing up for the private insurance plans that qualify for the national Exchange. Because new insurance mandates tend to be politically popular with the persons who suffer from the health conditions that would be covered, the Exchange plans will soon be burdened by new mandates that will make it increasingly difficult for them to offer low-cost insurance alternatives. If Congress decides to subsidize the struggling companies to keep them solvent (and to preserve the illusion of universal coverage), the surviving companies will become a Public Cartel version of the Public Option. With nearly everyone in the Public Cartel, and with the Cartel dependent upon Uncle Sam’s money, Congress and the health care bureaucrats will eventually move to “bend the cost curve” downward by rationing health care for tens of millions of Americans. The questions about what is covered and what is not covered (which to some extent is a question of who lives and who dies) will be decided by a Health Care Advisory Committee, a Health Choices Commissioner, and by Congress.

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