Greg Mankiw asks What’s the point of a public option for Health care?
Here is the crux of the matter:
“Would the public plan have access to taxpayer funds unavailable to private plans?
If the answer is yes, then the public plan would not offer honest competition to private plans. The taxpayer subsidies would tilt the playing field in favor of the public plan. In this case, the whole idea of a public option seems to be a disingenuous route toward a single-payer system, which many on the left favor but recognize is a political nonstarter.
If the answer is no, then the public plan would need to stand on its own financially and, in essence, would be a private nonprofit plan. But then what’s the point? If advocates of a public plan want to start a nonprofit company offering health insurance on better terms than existing insurance companies, nothing is stopping them from doing so right now. There is free entry into the market for health insurance. If a public plan without taxpayer support would succeed, so would a nonprofit insurance company. The fundamental viability of the enterprise does not depend on whether the employees are called “nonprofit administrators” or “civil servants.”
The bottom line: If the goal is honest competition in the provision of health insurance, the public option cannot do much good but can potentially do much harm.”
Unfortunately, I think Greg is asking a rhetorical question. Obviously all this talk about a “public option” is simply a smoke screen to create their actual goal of having a single-payer system.
The only remaining question here is whether they will accomplish their goal.