Public Plan’s Critics Deem It Too Affordable, Too High-Quality

Kevin Sack reporting for The New York Times explains what critics of a public plan are worried about:

But critics argue that with low administrative costs and no need to produce profits, a public plan will start with an unfair pricing advantage. They say that if a public plan is allowed to pay doctors and hospitals at levels comparable to Medicare’s, which are substantially below commercial insurance rates, it could set premiums so low it would quickly consume the market.

As Josh Marshall says, these are features not bugs. It’s true that a public plan able to piggyback on Medicare’s rates would have a cost advantage. The question is: Is that really so unfair? Or, perhaps better, unfair to whom? Customers would have the option of obtaining affordable health insurance. Private firms, meanwhile, would either need to find a way to cut costs sufficiently to be competitive with the public plan, or else they’d need to find a way to deliver health care that’s of demonstrably higher quality. That’s competition and that’s good.

Consider, after all, that the standard objection to a single-payer system is that it leads to objectionable levels of rationing and waiting times. Well, if that happens with a public plan, then it stands to reason that customers will want out and will sign on with private insurers. And if it doesn’t happen with a public plan then it’s true that the public plan might win out, but what’s wrong with that? If it’s actually the case that a public plan can deliver equal quality at lower cost, then it should win out. If the private sector can do better, then they should be able to prove it in a competitive marketplace.