The Public Option; Is it the end-all, be-all for Reform?

In a New York Times article Richard Thaler discusses why he believes the public option portion of the proposed Healthcare bill will be neither detrimental nor helpful to the reform process. Thaler believes that the public option is merely a distraction from the issues in the Healthcare debate that truly matter, such as what should happen with the 47 million people who are currently uninsured and how we can make the healthcare system more cost effective (Thaler, 2009). He also discusses the issues that the Democrats have glossed over in their appraisal of the public option. He states why some Democrats are pushing for a public option (because they feel that competition with the public option would be the only way that the private healthcare insurers could be forced to operate effectively), and quickly responds with an analysis of why this isn’t the case. He also informs the public of the aspects of the public option that the Republicans might have been too harsh with in their critique. For instance, the Republicans believe that the public option will push the private healthcare insurance companies out of business. Thaler calls on the example of the government-operated postal service and its private competitors (UPS/FedEx) to prove that the private companies get most of the market anyway. Throughout the article, Thaler contends that both sides have blown the pros and cons of the public option out of proportion, and makes a good argument for the assertion that the public option is not the end-all, be-all for reform.

I agree whole-heartedly with a lot of what Thaler has to say. He responds to both sides of the argument from a purely economic standpoint, allowing him to form a clear and intelligent analysis of the situation. In recent weeks, I have come to believe that the public option should not be the central focus of this debate and Thaler’s article confirms my thoughts. The question now should be: what next? If the public option isn’t the answer, what is?



http://www.nytimes.com/2009/08/16/business/economy/16view.html