Peter Morici
The Baltimore Sun
Sunday, Dec 27th, 2009

Senate Democrats have managed a compromise on a health care bill that is a fraud on the American public, which is increasingly leery about a government-run health care option.

Instead of a government health service to provide coverage to individuals not covered by company plans, the Senate bill authorizes the federal Office of Personnel Management to contract with a nonprofit insurer to provide an alternative to private health care plans. (The post office is such a nonprofit – it walks, talks and doles out mediocre service just like the motor vehicle office and Veterans’ Affairs Department.)

This public-private plan would have a disproportionate share of participants with expensive pre-existing conditions and chronic problems. Although it would have slightly lower administrative costs than the likes of Aetna or Humana, this adverse selection of clients would compel it to provide inferior service and curtailed benefits – unless the federal government empowered this nonprofit to force doctors, hospitals, pharmaceutical and medical device companies to accept significantly lower reimbursements than they do from most private insurers. Inferior patient care is the more likely outcome.

Just as with the House bill, private companies will find it cheaper to drop coverage and pay a tax, thus pushing their employees into this public-private option.

Full article here