As new polls show increasing support for a new health insurance option, Republicans are inventing new reasons to oppose what has quickly become the centerpiece of the health care reform debate. Here is Rep. Paul Ryan (R-WI) on CNBC’s Squawk Box explaining that a public health insurance option won’t be able to compete with private insurers because it will not pay its staffers. Presumably, Ryan thinks the employees who administer the public plan will have to work for free:
It’s impossible to have a level playing field with a public plan. Like I always say, it’s like my seven year old’s daughter lemonade stand competing against McDonalds. There is no way it’s a level playing field. The public plan doesn’t pay taxes, the public plan doesn’t have to account for payroll or benefits for its employees. The public plan gets to pay Medicare rates, which for hospitals is 30% below average and for doctors is 20% below average. So it’s a stacked deck and what ends up happening is that the public plan eventually crowds out the private plans and everybody goes on the public plan and you, voila, eventually have a government takeover of our health care system.
Presumably a public health care plan will have to pay and manage its employees’ benefit plans, just like Medicare does today. Moreover, private plans will play an important role within any framework of public/private competition, they just won’t maintain their present monopoly on coverage — something Ryan’s health care bill cheerfully extends. And while Democrats have detailed the various ways in which a public plan can, in fact, compete fairly with private plans; they have not denied it the right to use its inherent advantages — i.e. lower administrative rates, ability to use Medicare-like prices — to charge lower premiums to its consumers. After all that’s how McDonalds — which uses its fast food market power and other efficiencies to secure cheaper prices with providers and then passes on those rates to customers — is able to out compete his daughter’s lemonade stand.
If we’re outlawing the public plan, should we also ban McDonalds?