Washington state Gov. Jay Inslee wants to create a state-run health insurance plan to compete against private coverage on the Evergreen State’s Obamacare exchange. This plan, known as a “public option,” is a terrible idea. It’d be a boondoggle for taxpayers and open the door to a future single-payer system.
Inslee claims a public option would increase consumers’ coverage options and “start bringing down costs.” But history proves that such a system would fail. A provision in the Affordable Care Act created CO-OPs, nonprofit health insurers run by their customers, which operated much like a public option. But they couldn’t compete with private insurers, who had years of experience and a profit incentive to provide appealing coverage options. Nineteen of the original 23 CO-OPs collapsed.
A public option could only compete with private companies if it offered lower premiums by operating at a loss. That’s bad news for taxpayers.
If politicians endlessly subsidized the public option, consumers would sign up in droves, attracted by its artificially low prices. The government plan would gradually push private insurers out of the market.
In other words, a public option would lead to government-run single-payer or “Medicare for all,” the ultimate goal of many progressives.
Inslee and his allies know that most states with single-payer aspirations have gotten hung up on the price tag. Vermont, for example, abandoned its single-payer dreams in December 2014 after Democratic Gov. Peter Shumlin discovered the system would require an 11.5 percent payroll tax on businesses and a new 9.5 percent income tax. In Colorado, nearly eight in 10 voters rejected a single-payer proposal in November 2016 that would have required a 10 percent payroll tax.
Last year, Washington lawmakers funded a $100,000 study to gauge the feasibility of implementing single-payer. While the researchers haven’t come up with an exact cost, an interim report makes clear that the plan would require “large new taxes.”
Rather than attempt to convince voters to support single-payer or “Medicare for all” on its merits, Inslee evidently prefers a covert government takeover of the insurance industry and eliminating private coverage. Taxpayers and patients mustn’t let themselves be duped.