Fannie, Freddie and Citizens Insurance have taught us a resounding lesson: Government-backed competition in a private market undoubtedly distorts markets, drives out competition and often leads to taxpayer assistance down the road.
Should a "public option" be inserted into the health care market and perform like other government programs, 120 million Americans would lose their current coverage, according to actuaries at the nonpartisan Lewin Group. It's not hard to foresee employers dumping their private provider in search of less expensive, government-subsidized coverage.
Make no mistake: this "Public Option" is nothing more than a thinly-veiled dagger, aimed at the heart of the private system which, for all of its undeniable flaws, has spurred the creation of the most vibrant and innovative health-care system in the world. After all, if the health care market becomes as distorted as would certainly be the case if private insurers are forced to try and compete with a taxpayer-backed entity, the result will be a savage curtailment of the prospects for incentivizing profits. As sure as the sun rises, one of the first casualties of such an environment will be the budgets for research and development. When collective cost containment becomes the dominant value, then the value of developing cutting-edge treatments and drugs (which are more likely than not to be denied coverage) will drop precipitously. Drug and medical research companies will cut to the bone (alas, all-too literally!) to preserve what is left of their profit margins. The ensuing contraction in innovation, along with the rationing which is the inevitable result of the sort of socialized system which will emerge from the growing pile of strangled private payers, will signal the enduring mediocritization of American health care.
It is a thing most fervently to be hoped that the American public looks very closely at that horse at the gates.