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.

Watch it:

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?

Ezra Klein points out that the public, in two successive polls now, strongly supports a public health insurance option and over at ThinkProgress, Matt Corley debunks the conservative myth that bipartisan health care reform must protect the private insurer’s monopoly for covering Americans under 65:

By claiming that a public option would destroy bipartisanship, Grassley is ignoring the preferences of a strong majority of Americans. Earlier this week, a New York Times/CBS News poll found that a public health insurance option (which would lower costs and improve quality) is supported by 72 percent of Americans, including 50 percent of Republicans. Additionally, Grassley’s antipathy to a public plan flies in the face of his own constituents. In May, the Des Moines Register Iowa Poll found that 56 percent of Iowans support a public plan.

Republicans have staked their entire opposition to health care reform on attacking and mischaracterizing one of the most popular aspects of health care reform. Sounds odd until you consider that the same NYT-CBS News poll that found that 72 percent supported a public option, also concluded that” two thirds are concerned their own health care will get worse if the government creates a system to provide health care to all Americans.”

So their argument goes something like this: pass a public option, employers will drop coverage, and Americans will be stuck with an inferior public plan. Their latest claim that President Obama has reneged on his pledge to allow Americans to keep their existing health coverage, strikes at this very vulnerability.

It’s worth pointing out, however, that the public plan, along with all of the other private plans in the Exchange, would have to offer comprehensive benefit packages that provided quality care at affordable rates. Secondly, progressives are not interested in dismantling the employer system. From a logistical point of view and to those concerned about continuity of care, moving the 160 million Americans who receive employer-sponsored benefits into new plans would be a costly nightmare. The idea is to build on the employer sponsored system and achieve coverage through shared responsibility. That way, you preserve the employer contribution, an important source of funding health care reform, and allow Americans to say in their current plans.

The goal is to reduce immediate shifts but still preserve choice. For this reason, the House Tri Committee health care bill phases in participation in the Exchange when it goes into operation in 2013:

- Individuals and employers with 10 or fewer employees in 2013
- Individuals and employers with 20 or fewer employees in 2014
- Individuals and employers with more than 20 employees in 2015