The Logic of the Public Plan

Conn Carroll / June 23, 2009

At his press conference today, President Barack Obama defended his insistence that health care reform include a government-run insurance plan, explaining:

Why would it drive private insurance out of business? If private insurers say that the marketplace provides the best quality health care; if they tell us that they’re offering a good deal, then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.

It is the President’s logic that is fuzzy here.

Congress’s ability to pay doctors and other providers less will hide the true cost of the public plan. Undercutting private insurance will drive enrollment to the public plan. That’s not competition on a level playing field. (more…)