Public Option Healthcare: Tasteful in Theory Alone

By
Victor Arredondo
on
May 2, 2021
Category:
Economic Policy

Public option healthcare, the progressive movement that was promoted by Former President Obama, is slowly becoming a campaign promise kept for President Biden as it saw the beginning phases of implementation in the President’s $1.9 trillion Covid-19 relief package by way of subsidies to citizens. The necessity for this to be included in his bill, along with many aspects within the bill, is another conversation- one that undoubtedly needs to be had in combat of modern monetary theory and reckless administration spending. Additionally, as Doug Badger, Domestic Policy Studies Fellow at the Heritage Foundation states, “These expansions would increase the deficit by $34.2 billion over the next two years, but would do little to reduce the number of uninsured”. However, this will address the concept of the public option healthcare idea and why it appears to be viable by giving Americans the freedom to have the illusion of choice in their healthcare coverage, but instead how it completely infringes on the individual’s ability to choose their own healthcare. The more universal that healthcare is will consequently result in fundamental American liberties and rights becoming less universal. 

First, what is a public option healthcare system? Essentially, it’s a public pseudo-option healthcare system as it is immediately a competitor to privatized insurance and if given enough time, will ultimately reach an undisclosed end goal of single payer healthcare. The common fallacy promulgated by its supporters is that the public option would offer lower premiums on healthcare; however, this is because it would pay doctors and hospitals considerably less than what private insurers would pay. Additionally, the public option is promoted as a system that will not entail supplementary spending after conception, because all premiums are charged to cover absolute cost. As reported by PolicyEd, Medicare was proposed to not need additional funding as the government would only need to pay for 50% of its costs, but in a few years the government had already increased its contribution to 75% and implemented a heavy tax increase on citizens. As reported by the Congressional Budget Office, “In 2018, Medicare benefit payments totaled $731 billion, up from $462 billion in 2008”. In addition to this, “As a share of total Medicare benefit spending, payments to Medicare Advantage plans for Part A and Part B benefits increased by nearly 50 percent between 2008 and 2018, from 21 percent ($99 billion) to 32 percent ($232 billion) of total spending, as enrollment in Medicare Advantage plans increased over these years.” As students have learned from their 6th grade history class, history will undoubtedly repeat itself. According to Lanhee J. Chen, Ph.D. and Public Policy Research Fellow at the Hoover Institution, “The public option would add $800 billion to deficits in the first 10 years and increase the federal debt by more than 30% of the gross domestic product by 2050 - the equivalent of $6 trillion in today’s economy”. If Congress allows unemployed individuals to utilize the public option for the first six months after they are laid off, which is entirely plausible with a vocal progressive crowd assuming leadership within the Democratic party, “that would add an extra $132 billion to 10-year deficits and increase the 2050 debt by an inflation adjusted $800 billion”. This nation can not afford the public option, and it especially can not afford to let the government assume leadership of it.

The federal government begins by organizing an alternative to private healthcare insurance. The idea is that they are now going to subsidize healthcare for all individuals. There will now be a baseline level of healthcare provided by the federal government. Socioeconomic factors take no precedent with the baseline as you do not have to be poor to access it. The individual does not need to be on Medicare or Medicaid either. Due to this occurrence, people will subsequently be thrown off of their insurance. This is the result of employers not wanting to cover the increased cost. Doctors will then be forced to take the government healthcare, because if the federal government does not force them to, the system will not work as designed. If a doctor or hospital says that they will not take the subpar reimbursement rates, then the government is either going to have to prosecute them or they are going to have a forced tie to the public option of Medicare or Medicaid. This would ultimately bankrupt hospitals and doctors. As reported by the Healthcare Financial Management Association, “As many as 55% of rural hospitals, or 1,037 hospitals across 46 states, would be at high risk of closure if a public option were implemented. The closures could cost 420,000 jobs. Rural hospitals not placed at high risk of closure may have to eliminate services and reduce clinical and administrative staff”(Daly).

Finally, the government will subsidize these programs beyond comprehension and then force all ancillary charges onto the private companies. This will bankrupt the private insurance companies. Now, this defeats the purpose of individuals aiming for a higher standard of living. Afterall, what is the point of taking high risks in hopes of high rewards if your accomplishment of more wealth will not be honored by the purchasing of higher quality commodities?  If someone works hard to live well, they should be able to purchase a higher quality of living materials. This includes health coverage. This corrupts incentive to obtain wealth and defeats promotion of individual flourishing. If everyone is eventually placed on the same baseline, poorly run government healthcare with no way to progress, an entire incentive of increased monetary living quality has been struck down. If an individual makes enough money to afford better healthcare, they should have the liberty and market availability to purchase that coverage at their will.

There is a reason that every Democrat who talks about the public option talks about it knowing that the eventual goal is the destruction of the private insurance industry. Democrats should skip the banter and rhetoric and promulgate the public option as it should be, a Single Payer Healthcare system. Public option, at its core, is just delaying Single Payer Healthcare. The government maintains the idea of individual liberty to personally select desired coverage, but will watch from the shadows as the private companies, who provide the higher quality coverage and previously competitive prices, slowly drop their customers as they file for bankruptcy. Privatized insurance is where Americans are getting the bulk of preferred healthcare. According to Census.gov, 68% of Americans are enjoying their private health insurance coverage. As the Heritage Foundation points out, the government first creates the illusion that their plan is less expensive by shifting all the costs to doctors and others from low government payment rates by coercing them into joining the new government healthcare plan. Then, they make the private alternatives unaffordable. Following that, the private insurers go bankrupt. This is the true goal of the public option. The healthcare market will then consist of a single payer system based upon the notion that healthcare is a fundamental human right.

Healthcare is by no means a right and for all intents and purposes, it should not be treated as such. (I do not intend to drift too far from public option healthcare to single payer healthcare, but if the eventual goal of Public Option Healthcare is Single Payer Healthcare, then the ethics of it should be addressed.) It is immoral to demand the right that someone provides you with medical care. There are two fundamental views of “rights'' in existence. First, there are negative rights. Negative rights are duties of non-interference. These are rights that are given to humans by God or by nature and as an individual being you have the unfettered access to these rights. A rather simple image of this is enshrined in the Bill of Rights as they allow for individual protection and individual ownership. Then, there is the positive rights vision. This is the duty to provide or act a certain way. The right dictates complying. This is the view that essentially rights come from the government and that there is a singular, small collective that prescribes rights to the remaining. This vision gives a singular cohort the ability to dictate individual rights. Would it not make logical sense that a right of complying and imposing (positive rights) would naturally conflict with a duty of non-interference and individual liberties (negative rights)? Seems a little scary, right? The best way to detect these rights is whether a right that is articulated necessitated somebody else’s individual labor or their personal time. Of course, the freedom to speak your will and own your property does not require anything of anyone except the inability to infringe on that right. However, if someone claims they have a right to healthcare, and are granted that positive right, then the private provider is required to provide it up to the threatening and demise of their life. To restate the previous claim, it is immoral to demand that it is your right that anyone provides you with medical care. A healthcare provider may notice your distress and can offer a charitable form of aid, but your necessity does not change the basic logic that medical care is a service and a good provided by a third party. 

If increased individual flourishing and wellbeing is the end goal, then it is best to treat healthcare as a commodity. As provided by Ben Shapiro, JD, in an article published by Britannica, 

“To make a commodity cheaper and better, two elements are necessary: profit incentive and freedom of labor. The government destroys both of these elements in the health-care industry. It decides medical reimbursement rates for millions of Americans, particularly poor Americans; this, in turn, creates an incentive for doctors not to take government-sponsored health insurance.” (Shapiro)

He goes on to say, “whereas government-sponsored medical care requires a top-down approach that violates individual liberties, generates overdemand, and quashes supply, markets prize individual liberties, reduce demand (you generally demand less of what you must pay for), and heighten supply through profit incentive”. As has been discussed in this article thus far, Shapiro is entirely accurate. As outlined in an article by the Federal Trade Commission, competition within the market unequivocally provides for increased overall quality of a good or service and a likely decrease in pricing. In accordance with logical necessity, anyone can comprehend that the fewer manufacturers and providers there are in a market, the less an incentive exists to lower prices for consumers and to improve the quality of that good or service. The more competition that is added will undoubtedly incentivize the producer to draw consumer attraction by, say, lowering prices and enhancing the degree of the provided commodity. According to the Cato Institute, 

“A public plan, regardless of how it was structured or administered, would have an inherent advantage in the marketplace over private insurance companies because it would ultimately be subsidized by American taxpayers. It would also have an advantage since its enormous market presence would allow it to impose much lower reimbursement rates on doctors and hospitals, similar to current reimbursement practice under Medicare and Medicaid. “(Tanner)

Disregarding individual liberty to choose personal health coverage that will ultimately be doomed, an entity that is so dominant in a specific market that would then “allow it to impose much lower reimbursement rates” on the caregivers is not a desirable thing. This seems to be commonly misunderstood or misrepresented as a good aspect. To reiterate, the lower reimbursement rates that are given to hospitals, the more likely they will see financial trouble with improper compensation for their services and possibly go bankrupt. The less competition in the market, which will reach singular capacity with a dominant taxpayer subsidized force in the healthcare market, the more quality declines- a market function in its most simplistic form. There should be no compelling argument for the case of the government providing this public option and quality being anything near satisfactory. By now there is no conclusive argument to refute the previously stated by advocating for the benefits of a government-run healthcare system. The government has lost its credibility when it comes to providing things for the public as it has seen infinitesimal success. However well-intentioned the government may have been, it still has discounting factors in its closet such as the welfare state, the war on drugs, the department of education, instances of counter-terrorism, U.S.P.S., Department of Veteran Affairs, the EPA, Social Security, and the Internal Revenue Service to name a few. As Milton Friedman, an American economist, statistician, and recipient of the 1976 Nobel Memorial Prize in Economic Sciences who opposed government-run healthcare said, “One of the great mistakes is to judge policies and programs by their intentions rather than their results”(WSJ). 

The famed magician’s act of theatrical audience misdirection is quite relevant in the discussion of the public option. The magical performative maneuver exists solely to present the audience with two elements actively happening. The first is used as a distraction. It is something the audience will gravitate to long enough to keep their attention away from the other element that is happening. This other element, happening in the shadows, is the real trick. Once the distraction has served its purpose long enough, the second element is presented as a completed and perplexing trick. The audience never saw the second element being developed and were far too intrigued by the first element, the distraction, to care. The audience put their faith in the distraction, but the magician used it to lead them unknowingly astray. Just as the magician uses the first element as the distraction for the development of his actual trick, politicians promulgate their distraction as a continuously competitive healthcare market that will proceed to provide numerous privatized healthcare coverages and more; however, they slowly, yet assuredly, corrupt the healthcare market with a dominant government-run and powered eventual single payer system. It is time for the public option enthusiasts to take off the masks and reveal their true goals: single payer healthcare and the negation of the freedom to make one’s own health care decisions as a fundamental human right.

Works Cited

Associated Press. “Notable & Quotable: Milton Friedman.” The Wall Street Journal, Dow Jones

& Company, 6 Oct. 2015,

https://www.wsj.com/articles/notable-quotable-milton-friedman-1444169267

Badger, Doug. “Biden's Obamacare Expansion: A Costly Solution in Search of a Problem.” The

Heritage Foundation, 2021, www.heritage.org/health-care-reform/commentary/bidens-obamacare-expansion-costly-solution-search-problem. 

Bureau, US Census. “Health Insurance Coverage in the United States: 2019.” The United

States Census Bureau, 15 Sept. 2020, www.census.gov/library/publications/2020/demo/p60-271.html

Chen, Lanhee J. “A Public Option for Health Insurance Could Be Costly in Times of Crisis.”

STAT, 10 Feb. 2021, www.statnews.com/2021/02/11/public-health-insurance-disaster-times-of-crisis/. 

Chen, Lanhee J. “Key Facts.” PolicyEd, Aug. 2020,

www.policyed.org/intellections/public-options-true-cost/key-facts. 

Daly, Richard. “Public Option Could Endanger 1,000 Rural Hospitals: Analysis.” Hfma,

2019,www.hfma.org/topics/news/2019/08/public-option-could-endanger-1000-rural-hospitals-analysis.html. 

Federal Trade Commission, 12 Mar. 2021, www.ftc.gov/. 

Juliette Cubanski, “The Facts on Medicare Spending and Financing.” KFF, 20 Aug. 2019,

www.kff.org/medicare/issue-brief/the-facts-on-medicare-spending-and-financing/. 

Shapiro, Ben. “Ben Shapiro, JD - Right to Health Care - ProCon.org.” Right to Health Care, 21

Aug. 2019, healthcare.procon.org/source-biographies/ben-shapiro/. 

Tanner, Michael D. “Just Say No to Public Option Health Care.” Cato Institute, 5 June 2009,

www.cato.org/blog/just-say-no-public-option-health-care?queryID=e13e84f258692103b6aeef91dd6503f4. 

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