CMR: Chief Middle-management Resident (medipol) wrote,

An ethical argument for the public option

As we enter the final stretch of the legislative process for health care reform, we are beginning to get an idea of what the final bill will look like based on the five existing bills: definitely regulation of the insurance industry (no more "pre-existing conditions"), most probably an individual mandate to obtain insurance (enforced by a fine or a tax), and maybe (?) a government-run public option to compete with the private insurers.

Is there any other place in our lives where the government mandates that we purchase a good which is only available from private vendors? Car insurance is similar, but there is no mandate to purchase car insurance unless you wish to be licensed to drive -- and many people are not licensed because they don't drive. Businesses often have requirements to carry certain kinds of insurance, but businesses aren't endowed with individual rights.

We do have laws in this country that compel mandatory attendance in school (with exceptions for home-schooling, etc). However in this case, the government also provides the means to meet that mandate: the public school system. (We are so lucky that Horace Mann lived in a different era ... in today's world, we'd have bitter partisan fights about creating a public school system and a "right" to a basic education, and we'd probably end up with a multitude of profit-seeking private schools who used their political influence to stop the creation of public schools.)

Is it ethical to institute a mandate for everyone, but not provide the means for filling that mandate? I'd argue no ... if we believe as a society that everyone should have health insurance (which is what the legislation does, via a democratic process), then it is also our obligation as a society to ensure that health insurance is obtainable. And the only way to *guarantee* the availability of insurance is to have a public-sponsored program.

Private companies are not permanent, nor are they necessarily stable. It's not a far stretch of the imagination to see a world where due to, say, a fiscal meltdown, all private health insurance companies suddenly go insolvent and are unable to offer new policies. Suddenly, we have a law that requires coverage, but the marketplace is unable to offer a product to satisfy that law. The failure is with the insurance companies mismanagement, but the penalty is enforced on the consumer. Through no choice of their own, Americans are penalized by the law.

I'd argue that it would be unethical to write a law that allows citizens to be put in such a bind. That's why I'd argue that a public-sponsored insurance option is a necessary part of any health care reform that also includes an individual mandate.

I realize that a focus on the individual mandate opens up libertarian arguments against it. However, I believe we have a right as a society to determine that some things are social goods, and that the state can use its power to tax and/or fine in order to enforce that social good. Again, education is similar. And so are the police and fire departments -- people are required to pay taxes (under penalty of imprisonment) to support those endeavors because there is a public good generated by having those services available to everyone. And it is much more efficient to have everyone paying into the system to support those departments than to have, say, a "fee for service" police department. ("Welcome to Cops 4 Less: Filing a robbery claim will cost $500, charging someone with assault will cost $350 and don't even ask about investigating white-collar crime -- that'll cost you an arm and a leg.")

Finally, turning to the perpetual argument against the public option: it'll drive private companies out of business. First, I doubt it -- private firms will find markets where they can deliver value to customers (perceived or real), and people will pay for that additional service above what the public option offers (see: MediGap policies). Secondly, even if it did, that would be only because the public option was more efficient than private firms (they couldn't offer additional value, so they went out of business), so we'd be doing that same task of providing insurance to the population at a lower overall cost to society. What isn't to like about being more efficient in 16% of our economy? Oh, that's right, there's less room for profit-seeking enterprises to capture profit without providing additional value.

Which brings me to my concluding point: health insurance reform with an individual mandate but without a public option is nothing more than the "Health Insurer Bail-Out Act of 2009" -- we'd be giving tax dollars straight to the private firms, who have a market guaranteed by law. Shouldn't we demand that they at least compete for our tax dollars?

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