Obama: Public Health Option Would Compete With Insurance

| by Michael Allen
Barack ObamaBarack Obama

When the Affordable Care Act (ACA), also known as Obamacare, was first introduced in 2009 it included a "public option," which would have allowed Americans to choose a government plan instead of a private health insurance plan.

However, several "Blue Dog" conservative Democrats opposed the public option and it was eventually dropped in order to pass Obamacare against complete GOP opposition.

President Obama wrote a research paper that was published by The Journal of the American Medical Association on July 11 that said:

Congress considered and I supported including a Medicare-like public plan. Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers. The public plan did not make it into the final legislation.

Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited. Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.

However, The Wall Street Journal warned on July 12 that Obama's plan would destroy the private insurance industry (which has reaped billions of dollars from Americans):

Mr. Obama is re-endorsing what he had hoped in 2010 would be a way station for government-run single payer that would gradually wipe out anything resembling private insurance. Insurers can’t outbid a "free" program that is open to all or most and has the unlimited access to the Treasury that Medicare enjoys. A market exodus would be inevitable.

Democrats claim this would merely be another choice, but they tried a trial-run public option with ObamaCare’s co-ops, which were given up-front federal cash infusions and then were supposed to operate like normal companies. Of the original 24 co-ops, only nine are alive—and most of the survivors are ailing.

As a matter of record, the nonprofit health care co-operatives are not the same as a public option. notes that The Wall Street Journal did not mention that the co-operatives had their funding cut by the GOP-controlled House.

This omission by The Wall Street Journal, which is owned by Fox News parent company News Corp, is a well-worn tactic of opponents of Obamacare.

The New York Times noted in October 2015:

In recent months, several nonprofit insurance plans that were created to compete with for-profit insurance plans under the Affordable Care Act have run into financial difficulties. Republicans and other critics of health care reform are cynically pointing to their problems as evidence that the whole reform effort is a waste of money that ought to be repealed.

They neglect to mention that the nonprofit plans, known as health insurance cooperatives, were created as a weak, underfunded alternative to a much stronger option that the Republicans blocked from passage. noted several studies found that increased competition in the health insurance industry from a public option would likely bring prices down, cover people nationwide unlike private insurance (and its limited provider networks) and take the burden off employers to provide healthcare coverage.

The Wall Street Journal's ominous warning of a government-run single payer plan is not clear as numerous countries with such plans consistently rank above the U.S. when it comes to health care.

Sources: The Journal of the American Medical Association, The Wall Street Journal via, The New York Times / Photo credit: Pete Souza/Wikipedia

Do you support a new public health option?
Yes - 0%
Yes - 0%