Weekly Pulse: Republicans warn that public insurance will be too good and too popular

A common theme is beginning to emerge in right wing critiques of health care reform. These critics aren't worried that government run health insurance won't work. On the contrary, they're openly warning that it will work too well and people will like it too much. Republicans are predicting that government-run insurance will be cheaper, more popular than private insurance, and more politically popular for Democrats.

Comments

[dr2chase]

Unusually, the Republicans are probably right about this one. There's about 20 other countries with universal health care (either government run, government insured, or heavily government regulated) and their citizens are all covered, at a lower cost per capita, and they live longer, and spend less time sick.

There is one follow-on problem to universal health care (a problem for Republicans and Libertarians, that is), which is that it creates a pressure point (the government) for actual public health measures. Just for example, it is amazing that it is still legal to put transfats into foods, and it's amazing that it's legal to routinely dose farm animals with antibiotics. Chips, sold in most grocery stores, are insanely salty (honest-to-goodness, even a half-assed attempt at reducing your sodium intake, recalibrates your taste buds). Compared to northern Europe, we do nothing to encourage cycling and walking.

[Alon Levy]

Lindsay, it's weird that your post doesn't link to a single conservative piece making that argument. Where do right-wingers argue what you say they argue?

[Eric Jaffa]

Alon Levy -

The reference seems to be to this Cato blog-post worrying that socialized medicine would make Obama popular with more people.

[Lesley]

Yes, public health insurance might put those greedy private insurers out of business. Wouldn't that be a shame. Cry me a river, scumbags.

[Chris Mays]

It must suck being a Republican. You have to constantly oppose anything that helps people lest it make government look good.

[(O)CT(O)PUS]

Health care reform will also become popular with the business community because it will lessen their employee benefits burden. That is why, for example, the American auto industry has been moving production to Canada. The availability of public health insurance in Canada has meant lower production costs per vehicle. Republicans will be big time losers on this one.

[Hawise]

Seriously, here in Canada, we complain about our universal health insurance, boy do we complain, but there isn't a politician alive who truly believes that that would let him touch that thorny issue with a ten foot pole. They can argue delivery issues, price issues, what to add or modify but eliminating it, never.

[Alon Levy]

Eric, the post consists of a quote from a communist blog saying that single-payer health care will make people more supportive of bigger government, and a warning to the Republican to take note of that. It doesn't argue anything, except perhaps that universal health care equals communism. It doesn't imply at all that "a common theme is emerging in right wing critiques of health care reform... that it will work too well and people will like it too much."

[Lindsay Beyerstein]

I do cite a mainstream source quoting a Republican making the argument from the perspective of the insurance industries, it's contained within Ezra's post. I would have linked to the original Congressional Quarterly article, but unfortunately it appears to be subscription only.

[parse]

Linday, the piece you quote says Republicans have concerns "because the government plan might have access to price controls and other tools not available to private insurers," not because the plan will work too well. Also, how does a quote from a single source demonstrate a "common theme" that's beginning to emerge?

[Alon Levy]

There's still a very big gap between quoting one Republican and saying that "a common theme is emerging."

Besides, even the one quote Ezra supplies is less scary than you make it sound. Hayes talks about how government can cause a migration of people from private insurance by using regulatory tools, like price control, which aren't currently available to private companies. In other words, he's warning against public insurance creep, in which the government will use regulation to drive private insurance out of business. It's a political rather than economic or social argument against Obama's plan, but it's still different from saying that public health care is bad because it'll work too well.

[Lindsay Beyerstein]

I explained this my initial post announcing the gig, but several people have asked how it works, so I should probably explain again.

The Weekly Pulse is a showcase for healthcare-related content published by Media Consortium outlets over the past week and aggregated by Newsladder. TMC includes about 50 alternative media outlets including the Young Turks radio show, Salon, Raw Story, the Independent online papers (Center for Independent Media), and others.

When I'm writing the Pulse, my job is to drive traffic to the source sites. So, I keep links to external sites to a minimum. People have been thoughtfully sending me links to non-TMC healthcare sites. I read them, but I can't feature them in the Pulse.

The Republicans and the insurance industry are worried that the government would provide cheaper health insurance that consumers would overwhelmingly choose over private insurance. Delivering a cheaper product that people are eager to buy counts as making a better product in my book. Price controls are one example of how the government could make insurance cheaper. The government doesn't have to deliver favorable quarterly returns to investors, unlike most insurance companies, so there are potential savings there. Perhaps most importantly, there's sheer bargaining power of the federal government, if it chooses to use it. A bigger public insurance plan would be covering so much healthcare that it could negotiate more favorable prices than the private sector.

The bottom line is that insurance companies are scared of competition from the public sector, and they should be. Their product sucks and it's expensive, and getting more so all the time. According to one study 52% of Americans with health insurance are dissatisfied with the cost of their employee benefit plans.

[Lindsay Beyerstein]

The industry euphemism for fear of public competition is "unfair advantage". That's a tacit admission that the government can do better than they can.

The Obama plan involves two components, lowering barriers to purchasing private health insurance and offering a public option to compete with the private plans. The insurance companies love the former but hate the latter. If they were confident that they could compete with the government they wouldn't be fighting the public option tooth and nail. Nobody will be forced to be part of the public plan. If you like your private plan, you can keep it. The insurance companies are afraid people won't choose to keep their private plans.

[parse]

Nobody will be forced to be part of the public plan. If you like your private plan, you can keep it. The insurance companies are afraid people won't choose to keep their private plans.

Lindsay, the argument that Hayes is making, as I understand it, is that because goverment has access to price controls and other tools, it will be able to offer a cheaper product. Unable to compete, the private insurance industry won't be able to survive.

In some ways, this is similar to the argument consumer advocates make about Wal-mart hurting mom-and-pop stores. If someone responded to that arugment by saying "Nobody will be forced to shop at Wal-mart. If you like the hardware store on Main Street, you can keep shopping there." But the point is that if Wal-mart drives all the local stores out of business, consumers won't have that option anymore.

I don't know if Hayes' similar argument about insurance is valid, but you should at least engage with it on those grounds. By your definition--"Delivering a cheaper product that people are eager to buy counts as making a better product in my book"--what the Wal-Marts of the world are doing counts as making a better product.

[(O)CT(O)PUS]

Parse, I believe your analogy is faulty. It does not necessarily follow that a government sponsored health insurance program will drive private insurers out of the market. In England, for example, there is BUPA, a private insurance program that supplements state-sponsored health care. In France and Germany, supplementary and/or alternative coverage is also available in the private sector at far less cost than what Americans pay.

A privatized health insurance system that leaves an estimated 50 million citizens disenfranchised, while leaving millions more under insured, is itself an inferior product. It is a ridiculous analogy to liken an American insurance company to a mom-and-pop operation when the more accurate descriptor would be "thieves and scoundrels." Wal-Mart is only beholden to its shareholders. Government has an obligation to redress unfair burdens borne by its citizens, and health insurance certainly qualifies.

[Lesley]

Hawise writes Seriously, here in Canada, we complain about our universal health insurance, boy do we complain, but there isn't a politician alive who truly believes that that would let him touch that thorny issue with a ten foot pole. They can argue delivery issues, price issues, what to add or modify but eliminating it, never.

Actually we don't complain about public health insurance per se as it's an excellent deal. What we complain about is the government's failure to provide adequate public care (though some Canadians are so thick they blame sick people for wearing the system out.) I've been convinced for some time that the federal government has orchestrated a long-term campaign to discredit the public system by withdrawing funding, which inevitably leads to poorer care. They've got the public just where they want them, demanding the "right" to pay for private care, which the government is only too happy to indulge. We are on the brink of losing a lot of our public care (we've lost a considerable amount already).

[cfrost]

The American system of providing health care essentially only through employers is an ingenious and effective means of keeping wage slaves from complaining or running off the plantation. That’s why Republicans like it.

[Alon Levy]

The industry euphemism for fear of public competition is "unfair advantage". That's a tacit admission that the government can do better than they can.

No, it's not; it's a tacit admission that just as for private companies to compete against a body that can tax a $14 trillion economy is like for family-owned supermarkets to compete against Wal-Mart. The government can always subsidize its health care operations from the general budget, taxing people regardless of whether they have private insurance or not but spending the money only on people with public insurance; it can choose its regulations in such a way that private insurance will become uncompetitive. If you don't think it can happen, read any pro-transit account of how American passenger rail gave way to roads and cars.

[dr2chase]

Unable to compete, the private insurance industry won't be able to survive.

As a consumer, I think that's great. Look at all the other countries where people live longer, healthier lives, spend less money per capita, and do it without leaving millions of people uninsured. If the choices offered me are "preserve the private insurance industry" and "save money while living a longer healthier life", I think it's clear which one any rational consumer would prefer.

[Alon Levy]

Look at all the other countries where people live longer, healthier lives, spend less money per capita, and do it without leaving millions of people uninsured.

Apart from Canada, all of them have private add-on insurance. In France, the percentage of the population with private add-ons is higher than the percentage of the US population with any insurance.

If you want to say that private insurance should be killed, you need to make one of two arguments: one, that the Canadian system is superior to this of any other country, or two, that Canadian-style health care will be easier to achieve than any system that still leaves room for private companies.

[Lindsay Beyerstein]

Alon, a minute ago you were arguing that a public alternative would doom the private insurance industry.

Now, you're pointing out, correctly, that the vast majority of countries with public insurance have a robust private insurance presence. Actually, you're wrong about Canada. We do have private add-on insurance here. I've had it.

You're arguing with a straw man. Nobody's interested in killing the private insurance industry for its own sake. The official plan is explicitly to create public/private competition. A lot of people don't care if the private industry is an inevitable casualty of reform, but there's no reason to assume it will be.

The industry flacks are trying to paint the darkest possible picture, but that's just their self-serving propaganda. They stand to make a lot of money if the government adopts half the program (mandate) but not the other half (competition). They have a vested interest in hanging crepe on the competition and talking up the mandate.

[Alon Levy]

Alon, a minute ago you were arguing that a public alternative would doom the private insurance industry.

No, I was arguing that based on the history of government actions, reasonable people could believe that it would. There's a big difference between saying "The Republicans are wrong to think that Obama's plan will lead to a complete destruction of private health care" and saying "The Republicans are worried that government run health insurance will work too well." One engages a legitimate worry by the other side, exploited as it is by lobbyists; the other twists the other side's argument to make it seem not just wrong but also evil.

[David Dzidzikashvili]

Government run health insurance won't work?

Government run health insurance won't work – I think this example has been proven in many countries that tried government run healthcare and failed. But we also see that Private healthcare does not work either, sometimes people get disqualified because they have one of the million sicknesses listed in the applications and those companies try to give insurance to healthier individuals because healthy individual = less doctors visits, less medications and drugs = more profits.

[Margalis]

William Kristol's infamous memo about the Clinton health plan argued the same thing, that the health plan would prove effective and popular and thus Republicans had to block it.