“Choice and Competition” Are Stupid

The most disappointing part about Obama's willingness to abandon the public option is that he doesn't even seem to understand why progressives think it is so important. A Politico story reports:

Aides said Obama does not plan to make a public option, or government plan, a make-or-break issue when he spells out his specifics. “We have been saying all along that the most important part of this debate is not the public option, but rather ensuring choice and competition,” an aide said. “There are lots of different ways to get there.”

I don't care about “choice and competition” in health care insurance. The American people don't care about more “choice and competition.” What they want is better quality and value in their health insurance. The public option would have guaranteed that everyone at least had the choice of one decent health care plan that was a good value. I think everyone would prefer the choice of only 2-3 great insurance plans rather than the choice of a dozen crappy over-priced plans.

More choice and competition is not a goal in and of itself. It might hopefully one day lead to better quality insurance at a more affordable price. However, the evidence is fairly damning that more competition from private insurance companies will lead to a market dominated by the companies most adept at denying claims, weaseling out of paying providers, and avoiding sicker costumers.

There are some ways (ways that will probably be less successful and less politically stable) to increase quality and/or value without a public option. The government could mandate a minimum medical loss ratio of 92%. The nation could adopt the Swiss system of making all basic health insurance not for profit. Insurance companies could be treated like utilities with yearly audits and regulator pre-approval of all rate increases. A regulator could be given the power to fine an insurance company out of business if it is caught trying to game the system.

If Obama was prepared to abandon the public option in exchange for a combination of these proposals it would be highly disappointing but it would at least be understandable. But abandoning the public option for just more “choice and competition” is just plain stupid. If Obama thinks helping to create new private insurance companies and working to expanding the reach, territory, and power of current for-profit insurance corporations will be an acceptable “compromise” for progressives, he is on a collision course with political disaster. We want better health insurance not more bad options.