Economics and politics of the public option, in a nutshell

Ezra Klein:  Liberals...think the market will, well, work: The public option will provide better service at better prices and people will choose it. Or, conversely, that the competition will better the private insurance industry and that people won't need to choose it.

But that confidence rests on a very simple premise: The public sector does a better job providing health-care coverage than the private sector. If that proves untrue -- and I would imagine most every conservative would confidently assume that that's untrue -- the plan will fail. The public option will not provide better coverage at better prices, and so it will not be chosen, and it will languish. Indeed, if it languishes, it will lack customers and thus lack bargaining power and economies of scale, and get worse even as the private insurers get better. In that scenario, the public option not only fails, but it discredits single-payer entirely.

The liberals are willing to bet that they're right. It's not a sneaky strategy: It's an up-front wager. The conservatives are not, however, willing to bet that they're wrong. They're willing to say the public option will fail, but not give consumers the chance to decide that for themselves.

Comments

[DKSampson]

As always, a very wise assessment! If we are wrong we will go down in flames and the cons will say "We told you so." If we don't get to prove ourselves right or wrong, the cons will say it would never have worked anyway. That's the advantage to naysaying. The disadvantage is that naysaying never really improves anything.

[John Petty]

I don't always agree with Ezra Klein, but I thought he nailed this one.