Reader Question – Why not cap government involvement?

A reader writes:

During President Obama’s national health care address he stated that government health care would only cover 5% of the population. If the Republicans are so concerned about a nationalization of healthcare then why not just put into the bill that maximum participation is set at 5% of the American population. Then costs for the program could be budgeted better and the Republicans can stop saying that the President is looking to “Nationalize Healthcare”.

It’s a valid question.  But it’s counterproductive for a number of reasons.  First of all, the reason to have a public option is for competition.  The specter of a government plan is intended to drive private insurance companies to lower rates and/or increase benefits.  If those companies knew that the most business they could lose is 5% of the population (while picking up way more than that from the uninsured now buying insurance), there’s no reason to compete.  Just let that business go.  This would mitigate the public option’s effects on cost containment.

Moreover, many people believe that the public option will succeed and that private companies can’t.  Those people would balk at denying this viable option from growing, when it could eventually save significant over the long haul.

Finally, this isn’t intended to “nationalize insurance”.  It’s just shifting who is providing the insurance.  Changing the bill, in a way to lessen its ability to reduce costs, just to answer a fear not based in reality is not good policy.

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