Health care costs in America have spiraled out of control, making health insurance inaccessible to many while crippling the US Economy. For these reasons, President Obama has made passing health care reform a primary agenda, and a central component of this reform is the institution of a public option, a government-administered health insurance option which would compete with private health insurance.
Rising Health Insurance Costs in America
According to The National Coalition on Health Care (NCHC), a non-partisan authority on healthcare in the United States, spending in America "is expected to reach $2.5 trillion in 2009, accounting for 17.6 per cent of the gross domestic product (GDP).” In contrast, so-called Western nations spent an average of only nine per cent on healthcare in 2007, according to the Organisation for Economic Co-operation and Development (OECD). Such a staggering disparity has made healthcare reform an economic imperative in the United States.
For individuals, the story is just as dire. With health insurance costs rising faster than incomes in America, both affordability and accessibility have become major problems. An estimated 45 million Americans are without health insurance, and many more could find themselves without coverage as costs rise, prohibiting small businesses from being able to afford coverage for employees. According to the NCHC, “62 per cent of all bankruptcies filed in 2007 were linked to medical expenses.”
The Public Option: A Solution to Rising Health Care and Health Insurance Costs?
There is bi-partisan consensus that heath insurance costs must be brought under control. The debate in America has centered around how, exactly, to achieve this.
Many on the left believe that providing a public insurance option to all Americans – an option which would look similar to Medicare, the publicly-administered insurance option already available for Americans over 65 – could significantly reduce private insurance costs by driving up competition. The idea is that the government can provide Americans with an affordable, efficient option for health insurance coverage below current private insurance costs, thus forcing private insurers to increase their own efficiency in order to remain competitive, thus driving down overall costs.
However, many conservatives fear that private insurance companies will not be able to compete with a government-run health insurance program due to the fact that such a program will not be hamstrung by identical profit margin requirements. While this fear is a legitimate one, it should be noted that President Obama stated, in his address to Congress on September 9, 2009, that a public option would not be funded by taxpayer money, and would have to be run and sustained solely through premiums collected, thus making it a self-sufficient insurance program.
A Public Option Misconception: A Government Takeover of Health Care?
Some critics have argued that institution of a public option would equal a government takeover of health care in America, thus turning health insurance into a socialist-styled system similar to Canada. This, however, is not true. Canada has what is called a single-payer system in which the government collects tax revenue from its citizens to run a complete and comprehensive health insurance system only through the government. President Obama's suggestion for health care reform via a public option differs from Canada in that the government would merely be providing a health insurance choice for Americans alongside private insurance plans which already exist.
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