The 'Honest' Question

Would it be possible for a public option to make the private sector ‘honest,’ or would a public option simply cause the private sector to go bankrupt? The very purpose of the public option is to force lower prices by interjecting a leaner, cleaner, operating machine that gives the insurance tycoons a run for their money.

The ‘honesty’ goal is causing some confusion. The public option will offer medical insurance at a lower price, therefore drawing in Americans who currently can’t afford medical insurance. Only those individuals without affordable employer-provided insurance and small businesses that can’t afford their own reasonably priced plans would qualify for the public plan. That means that most insurance company customers, who are affording their plans, would not be eligible for the public option. So how will the public option force the private sector to lower prices?

At the same time, new legislation will prevent insurance companies from denying customers with preexisting conditions. This is good news for the insurance companies because they will get more customers. If most people won’t turn to the public option, and health care reform increases business for private insurance companies, then how would a public option force the private sector to be ‘honest?’

I answer may lie in contradicting data. Even though many people will not be eligible for the public option, it is estimated that over 100 million Americans may leave private plans for government health care. In fact, the purpose of the public option itself implies that the government is betting many people will turn to government health care thereby forcing private companies to lower prices or file bankruptcy.

The eligibility requirements for the public option would serve as the governments leash on the private sector. The harder the government makes it to be eligible for the public option, the less competition threatens the private sector. So the next question is this: what are the public option eligibility requirements that will make insurance companies ‘honest’ without forcing them into bankruptcy?