Listener: Better Than The 'Public Option'

Michael Green, from Minnesota Public Radio land, describes himself as an Obama supporter and no fan of the "public option" for health insurance. Green argues there's a better way to create competition than having the government start its own insurance plan. He writes:

Since I always enjoy your analogies on the program, I'll start with my own from the healthcare realm. My mother currently takes about ten different medications a day for a variety of reasons. When I asked her to walk me through why she takes each pill, it turned out that only a few were for true underlying medical needs. The rest were to counteract a side effect of the first few and some were to counteract the side effects of each other. I feel like the public option is in the later category.

I think the underlying issue that we are trying to address is lack of competition. So this begs the question "Why isn't there more competition in health care?" Since we are supposed to be in a free market, I'd turn the question and ask "What's broken such that there isn't NATURALLY more competition in health care?"

From an outsider's perspective, I think the answer to the above question is (1) varying state insurance regulations prevent insurers in one location from competing in another location and (2) incentives that favor employer-based health care (i.e., tax deductability for purchasing through employers) prevent the individual from choosing freely among the limited options in the state.

If the above is true, wouldn't the following (hopefully simple) ideas address the true issue?

(1) Create a single national standard for health insurance regulation that allows insurers to compete in all states

(2) Mandate that everyone have insurance

(3) Mandate that insurers take all comers — not charging for preexisting conditions and

(4) Eliminate any financial disincentive for individuals/families to purchase insurance on their own.

I understand that items 2 and 3 are squarely in the reform debate. I've heard very little about items 1 and 4. BTW, I'm curious to know if the public option would have to abide by each state's regulations.

I think it would be better for all if the government can address the underlying problem rather than develop a solution to address the side effects of prior "solutions." Other thoughts??

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