President Obama says the “public option” wouldn’t threaten private health insurance:
I think private insurers should be able to compete. They do it all the time.
I mean, if you think about it, UPS and FedEx are doing just fine, right? No, they are. It’s the post office that’s always having problems.
I have to say, it takes a lot of chutzpah to use government incompetence as an argument for government-run health care.
Nevertheless, let’s take the argument seriously. Obama is saying the post office proves that private companies can coexist in a market with the federal government. But the post office proves exactly the opposite.
The post office’s core business is first-class and bulk mail, and it is illegal for private companies to compete in that market. In fact, not only is it illegal for UPS or FedEx to offer first-class mail service, it’s also illegal for us, the public, to use the services that UPS and FedEx do offer as a substitute for first-class mail. If you FedEx a document that the Post Office deems non-urgent, they can fine you the cost of mailing it first-class.
The government does allow UPS and FedEx to compete in the smaller market for packages and express mail. In those markets it’s true that the private companies flourish while the government flounders. Why? Because the Post Office is supposed to break even (not that it usually does). It is unable to offer its services at a low enough price to drive out the private players. Moreover, not many politicians are interested in seeing the Post Office take over the package and express mail market.
That’s not what would happen with health care. Nationalized health care wouldn’t come close to breaking even. Quite the opposite. The federal government would massively subsidize its plan, making it more attractive than private plans. The private players couldn’t long survive against the federal purse. Indeed, as supporters of single payer have made clear, this is the point. The “public option” is a ploy to achieve single-payer.
POSTSCRIPT: All this ignores the fact that the bill before the House essentially bans private health insurance. All this talk of competition is a dead letter if that version passes.
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