“I have to assume that the people who are adamantly opposed to any sort of government intervention into their health care wouldn’t switch to a public health insurance option, even if it were cheaper than their current private health insurance.”

and

“But the government versus private enterprise issue doesn’t really come into play. With health care, it would be a very different ballgame, and that might play in favor of the private health insurance that people already have.”

Unfortunately, it’s not as easy as that. Most people don’t make their health insurance choices. That choice is usually made by employers, and they have an incentive to make a choice based on cost. If a company is struggling financially, they could stop providing insurance and instead pay the tax of 8% of payroll to sign up their employees for the public option. The choice is not made by the employee.

The government is able to stack the deck in its favor in this competition because it can tax individuals on private insurance they do receive through employers, and they can charge the common man less while charging the rich more, simply because it’s a government service. Private insurance companies can’t do this; the only thing they can do is charge more for those who use their services more (which sounds pretty fair), but they are now being attacked for doing this. Can you imagine if you had to bring your tax return with you to FedEx so they could charge you more if you’re rich, or if the government forbid them from charging more for shipping a heavier package over a longer distance? Yet that is what’s happening with health care reform.

But even if you want to overlook all the drawbacks in terms of fairness, or loss of our rights, because “think of all the people with no health care”, think of the feasibility. How can we cover 40 million more people and remain deficit neutral? Just doing what the insurance companies do but without the profit won’t do it. Insurance companies don’t make that much profit, really. Aetna, one of the largest health insurance companies, made only a 4.5% profit margin last year. Check their income statement at http://finance.yahoo.com/q/is?s=AET&annual. So removing the profit by switching to a non-profit model would only save 4.5% of the costs. We can’t cover twice as many people for less money by only saving 4.5%. Insurance companies don’t raise premiums from year to year, or limit the amount they’ll pay on certain procedures, because they’re greedy and they’re trying to rake in huge profits. They do it because they have huge costs and they need to bring in revenue in order to pay for them. If they didn’t raise prices to cover their costs, they would go out of business and then nobody would be covered. The government will be no different, unless of course it decides to operate the program at a huge deficit.

If we cover 40 million additional people, there are two options available. We can give them lots of personal choice (“sure, I’ll take that x-ray, why not”) and it will cost an absolute fortune and our debt will increase drastically, or they can keep it in budget by limiting what kinds of procedures you can get and what sorts of options are available. We simply cannot provide personal choice, lower cost, and a third party payer simultaneously. The promise of personal choice and deficit neutrality is impossible to keep.

We currenlty have a mixed public/private system. Any disruption in the delicate balance that currently exists between public and private plans will surely tip the balance in favor of the public option and will destroy the support that public plans reveive for the private sector. After all, once you kill the private plans, to whom can you shift costs?