Fact-Checking Republican Attacks Against The Public Option

obamatownhallToday during his speech in Green Bay, Wisconsin, President Obama reiterated his support for the public health option. “One of the options in the exchange should be a public insurance option — because if the private insurance companies have to compete with a public option, it will keep them honest and help keep prices down,” Obama said.

Indeed, a new public health insurance plan could restore competition into the consolidated health insurance market, lower health care premiums, lead the way in innovation, and improve health quality.

Republicans have mischaractarized the public option is a “government takeover” of health care. In this morning’s Wall Street Journal, Karl Rove argued that “if Mr. Obama signs into law a ‘public option,’ government-run insurance program as part of health-care reform we won’t be able to undo the damage.”

Rove’s rhetoric echoes the poll-tested talking points of Frank Luntz and other conservatives determined to protect the private insurer’s monopoly over coverage and deny Americans choice. The Wonk Room has compiled a fact-check of common public plan myths:

MYTH 1: A public option is unnecessary: “It’s unnecessary. Advocates say a government-run insurance program is needed to provide competition for private health insurance. But 1,300 companies sell health insurance plans. That’s competition enough.” [WSJ, 6/11/2009]

TRUTH: Insurer and hospital markets are dominated by large insurers and provider systems. Private insurers rarely negotiate with dominant hospital systems and typically pass on the higher costs to beneficiaries in the form of higher premiums. Already, “1 in 6 metropolitan areas in a 2008 study of more than 300 U.S. markets is dominated by a single health insurer that controls at least 70% of consumers enrolled in health maintenance organizations or preferred provider organizations.” Such consolidation negates any real competition. Without it, insurers don’t negotiate prices and boost their profits. In fact, “there have been over 400 health care mergers in the last 10 years,” and premiums have risen “nearly eight times faster than average U.S. incomes.” A public plan could, in an environment of head-to-head competition, push private insurance companies to negotiate more aggressively with providers and dramatically lower health care spending.” [Urban Institute, 10/03/2008; LA Times, 4/09/2009]

Read the full list or download a PDF version.