# Will a public option kill private insurance **URL:** \ **Category:** Great Debates\ **Created:** [August 11, 2009, 4:51pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079 "2009-08-11T16:51:12Z")\ **Posts on this page:** 15\ **Page:** 3
**Author:** ![hobscrk777](https://avatars.discourse-cdn.com/v4/letter/h/a6a055/32.png) [@hobscrk777](https://boards.straightdope.com/u/hobscrk777)\ **Post date:** [August 12, 2009, 2:26pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/41 "2009-08-12T14:26:03Z")
> [@athelas](#): > > As Greg Mankiw [said](http://gregmankiw.blogspot.com/2009/06/whats-point-of-public-option.html):The notion that a public option would compete on a level playing field strikes me as naive. Existing public options don’t do this. The USPS is currently facing massive losses that are picked up by the taxpayer, unlike Fedex or UPS. 11% of K-12 students attend private schools rather than the public option even though the public option is free while private schools have an average tuition of over $8K. And yet somehow FedEx and UPS are still around, and are many people’s perferred carrier… ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 12, 2009, 3:28pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/42 "2009-08-12T15:28:47Z")
I love that people believe in capitalism. However corporations do not. The HC companies have consolidated over and over wiping out competition. The simply set prices. Efficiency and competition are good for the consumer. Companies do not want to fight for customers and cut prices. They will do everything they can to eliminate it. The government will not limit prices for HC companies. They will just do it better and more efficiently. Medicare has customer service at the top of its to do list. It is not on private companies thoughts at all. They are fighting the premium payers to avoid paying what they are paid to provide. It would not be difficult to defeat their twisted business model.Who would want to stay with a company that wants to cheat the customers? ---
**Author:** ![Honesty](https://avatars.discourse-cdn.com/v4/letter/h/f04885/32.png) [@Honesty](https://boards.straightdope.com/u/Honesty)\ **Post date:** [August 12, 2009, 6:14pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/43 "2009-08-12T18:14:48Z")
> [@glee](#): > > It seems to me that the current US opposition to improving health care is based on fanatical Republicans with no use for evidence. Rather like Creationists. :rolleyes: Isn’t that the truth. The Republicans have claimed that any public option would be inefficient yet, in the same breath, they also claim that it’ll also kill private insurance. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [August 12, 2009, 7:43pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/44 "2009-08-12T19:43:06Z")
> [@Honesty](#): > > Isn’t that the truth. The Republicans have claimed that any public option would be inefficient yet, in the same breath, they also claim that it’ll also kill private insurance. Those are only mutually exclusive if you ignore the idea of negative externalities. Since the whole point of single payer health care is to convert internalised costs into negative externalities by socialising the costs of health care, that’s not a reasonable assumption. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 12, 2009, 8:18pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/45 "2009-08-12T20:18:00Z")
> [@Grumman](#): > > Those are only mutually exclusive if you ignore the idea of negative externalities. Since the whole point of single payer health care is to convert internalised costs into negative externalities by socialising the costs of health care, that’s not a reasonable assumption. For most people, with health insurance plans at least partially paid for by their employers, the cost of health care is already socialized. What the proposals do is to socialize it for the rest of the public. A single payer plan is not free (in the sense that people would pay for it like today) or does it necessarily eliminate the need for co-pays. In the past years many insurance plans have greatly increased the percentage that patients pay - can you demonstrate that this has slowed the rise in health care expense or use? ---
**Author:** ![Sateryn76](https://avatars.discourse-cdn.com/v4/letter/s/a88e4f/32.png) [@Sateryn76](https://boards.straightdope.com/u/Sateryn76)\ **Post date:** [August 12, 2009, 9:38pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/46 "2009-08-12T21:38:55Z")
> [@glee](#): > > I have no idea why this is being suggested when all the evidence is that UHC and Private Health Care work perfectly well side by side in countries already. > > For example, here in the UK I get treatment on the National Health system. I (and my employers) have paid for it through taxes. > My current employer (a private school) also offers me a Private Health Plan. They pay for it as a staff benefit. (I think I effectively pay something as it counts as a taxable benefit.) > > If I need standard medical treatment, I go to my local doctor on the National Health. > If I want exotic medical treatment or to skip any waiting list or to get a private hospital room, I use my Private Plan. > > It seems to me that the current US opposition to improving health care is based on fanatical Republicans with no use for evidence. Rather like Creationists. :rolleyes: Just out of curiosity, what’s the cost of the private plan? Is it something that is available only to, say, the upper middle class? And, a related question - is there anger in the UK about how “the rich” (or whoever) get special perks out of an additional private plan, and the poor should be treated the same? ---
**Author:** ![tagos](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@tagos](https://boards.straightdope.com/u/tagos)\ **Post date:** [August 13, 2009, 9:53am UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/47 "2009-08-13T09:53:06Z")
> [@Sateryn76](#): > > Just out of curiosity, what’s the cost of the private plan? Is it something that is available only to, say, the upper middle class? > > And, a related question - is there anger in the UK about how “the rich” (or whoever) get special perks out of an additional private plan, and the poor should be treated the same? No anger whatsoever. BUPA comprehensive (but with the usual host of ‘exemptions’) costs a couple of grand or so a year. But BUPA runs in a symbiotic relationship with the NHS, using NHS trained staff working in a private capacity and NHS facilities as well as their own. Serious conditions exempt from their cover are shifted to the NHS with its better facilities. Therefore private health cover is not too expensive but not directly comparable in costs to the USA. It is undoubtedly true that the US system is best for the very well off but the British simply find it incomprehensible that a country as wealthy as the USA refuses to provide universal health care. To us it looks like you pay more for less and the thought that medical costs can cause bankruptcy is shocking. ---
**Author:** ![TheMadHun](https://avatars.discourse-cdn.com/v4/letter/t/53a042/32.png) [@TheMadHun](https://boards.straightdope.com/u/TheMadHun)\ **Post date:** [August 14, 2009, 10:59pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/48 "2009-08-14T22:59:59Z")
“Will a public option kill private insurance?” I certainly hope so, but unfortunately not very quickly. Insurance is the largest unproductive sector of the economy. Their only tangible product is fine print and plenty of it. ---
**Author:** ![Indistinguishable](https://avatars.discourse-cdn.com/v4/letter/i/90ced4/32.png) [@Indistinguishable](https://boards.straightdope.com/u/Indistinguishable)\ **Post date:** [August 17, 2009, 4:42am UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/49 "2009-08-17T04:42:05Z")
> [@Fotheringay-Phipps](#): > > Conversely, I would suggest that before you get bogged down in complex math formulas, it might be a good idea to understand what the formulas represent and what the conceptual framework of what you’re doing is. Otherwise you run the risk of having a lot of valid formulas, with all sorts of algebra and calculus, all mathematically correct but measuring the wrong things. See below. > > This all seems impressive to someone who isn’t paying attention, and you can frequently get away with this because a lot of people’s eyes glaze over when you start whipping around math formulas so they just assume someone capable of writing all that knows what he’s talking about. Here’s your error: > > Your algebraic formulas represent profit as a function of _the number of units sold_ and they thus are based on other formulas that are derived from the number of units sold (i.e. revenue per unit and variable cost per unit). Thus your calculus is about maximizing profits _as a function of the number of units sold_, IOW the optimum number of units sold in order to maximize profits. > > What you’ve proved is that the optimum number of units sold in order to maximize profits does not depend on fixed costs, and depends only on variable costs. > > What you did not show, or even address, is what we happen to be discussing, which is what the impact of an increase in fixed costs on optimum price. None of your formulas have anything to do with the optimum price. > > I would guess that you’ve made a mistake and been confused by your math rather than deliberately skewed the issue. So I would suggest that you consider the above carefully before replying. > > But in general, I would note that if something seems intuitively obvious - as does the idea that providers pass along fixed costs to sellers - you need to think long and hard in a more conceptual manner before trying to disprove it with fancy mathematical formulas. But as **Rysto** closed by saying, surely the way to maintain the same number of units sold is to maintain the same price? It’s not like the “demand curve” will change in response to the change in the suppliers’ fixed costs. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [August 17, 2009, 2:05pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/50 "2009-08-17T14:05:24Z")
That ignores the supply side of the supply/demand curve. If fixed costs are higher for the market as a whole, then the supply curve is higher, and there’s less supply available at the old price, which pushes the point at which these curves intersect to a higher level. To use a hypothetical extreme example, suppose the fixed costs involved in opening a individual medical practice were increased to $5 million per year. It’s obvious that no doctors would stay in business charging current fees, and the increased costs would need to be passed along to the purchasers. Obviously nothing as extreme as that is being considered here, but I would suggest that all mathematical and economic arguments should be tested against this situation. (In addition, demand for medical is relatively price insensitive, partially due to its being mostly covered by insurance arrangements.) ---
**Author:** ![focusonz](https://avatars.discourse-cdn.com/v4/letter/f/9dc877/32.png) [@focusonz](https://boards.straightdope.com/u/focusonz)\ **Post date:** [August 18, 2009, 4:57am UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/51 "2009-08-18T04:57:25Z")
> [@gitfiddle](#): > > Will a public option kill private insurance **That has been it’s intent! I offer as evidence quotes from its proponents** > [@DigitalC](#): > > if it does i would consider that a huge positive side effect of the health care reform. > [@Gam\_Zeh\_Yaavor](#): > > It might just shrink it small enough to drown it in a bathtub, which I would do gleefully. > [@Voyager](#): > > too bad for the insurance companies. > [@Voyager](#): > > You look at overhead and areas of fat [sic profit], and these the private insurers have got in spades. > [@TheMadHun](#): > > I certainly hope so, but unfortunately not very quickly. Insurance is the largest unproductive sector of the economy. Their only tangible product is fine print and plenty of it. > [@elucidator](#): > > **I’d wager** that everybody here knows someone who has been dicked with by their health insurance company. > [@Voyager](#): > > The USPS losses are temporary, and caused by the shift in communications from the Internet. **I think** their volume was down some large amount. > [@Simplicio](#): > > The gov’t floats the USPS loans when it is in the red, but over the long term, the Postal Service is self-supporting. They eventually raise rates and pay back the loans, and I think they’re actually now being forced to put any profits in a fund to cover future over-runs to cut their reliance on federal loans. The public option will **probably be similar** , it will pay for itself through collecting premiums, not through federal subsidies. > [@Simplicio](#): > > And indeed, the USPS has competitors that manage to survive,\*\* presumably\*\* for the same reason. > [@Simplicio](#): > > Again, **it doesn’t appear** that this will be the case, or at least, any subsidy given to the public plan will also be available to the private one. > [@Simplicio](#): > > the amount of overhead imposed on even a small family practice by the private insurance companies is pretty nuts.\*\* I think\*\* the public plan will force them to improve this situation or go out of business. **Every one listed above is NOT thinking!!! Every one listed above is NOT elucidating!!! Every one listed above is NOT simplifying!!! Every one listed above is on a voyage to no where!!! I’d wager that everybody here knows someone who has been dicked with by the US government!!!** **TheMadHun is simply wrong!** Insurance companies [paid out billions for losses in Katrina, 9/11, other hurricanes](http://www.insurancejournal.com/news/national/2005/08/29/58900.htm). In order to pay out those billions insurance companies work everyday investing money received in premiums. Profits for insurance companies will be way down for 2008 and 2009 due to stock market and marxist-fascist-socialist-stalinist-poopypants lunitics screwing around in the mortgage backed securities market **Simplicio is simply wrong!** [The USPS made a decision not to compete with FEDX and UPS as they basically are hand tied by their mandate.](http://en.wikipedia.org/wiki/United_States_Postal_Service) Basically Obama’s claim that UPS and FEDEX do compete is groundless. And offering that relationship as evidence of the fate of private insurance to compete is non-sequiter, (argument where its conclusion does not follow from its premises) The USPS having a monopoly, cannot provide universal service obligation of affordable and uniform pricing so therefore did grant to UPS and FEDEX the right to provide service. Essentially the USPS purposely intends not to be competitive and really can’t be competitive based on its universal service obligation. Further, with years of understanding, [Congress does not provide funds for either general operations or capital investments of the USPS](http://thomas.loc.gov/cgi-bin/cpquery/?&sid=cp1103oft0&refer=&r_n=hr207.110&db_id=110&item=&sel=TOC_277554). The United States Postal Service (USPS) is funded almost entirely by Postal rate payers rather than tax payers. Congress has funded loans to the USPS to satisfy cash flow obligations but with rate increases and diligence in its operations has paid these back. This is not to say that the inclinations of Congress might be otherwise in the future. So McCaskill is wrong to compare National health care funding with the USPS funding. There is a clear desire by congress to fund certain retiree health care premiums on [page 65 of the house bill](http://edlabor.house.gov/documents/111/pdf/publications/AAHCA-BillText-071409.pdf). Unions and the SEIU would qualify for such subsidies. There is an intent by congress for the National Health care to compete with private insurance to reduce costs. And unless funding to the national health care insurance is restricted as with the USPS then the power of the unlimited ability of the federal government to tax and borrow, and spend then private insurance will not be able to compete. Also the 21 million employee government and 1 million employee USPS for that matter and the millions in labor unions will reduce the customer base for private insurance thereby limiting the ability of private insurance to spread the loss burden out among the largest pool of insured to be able to deal with calamities that befall a small subset of that pool. The private insurers will most assuredly slowly but surely go broke and with a government insurance option there will be no bailout!!! In the long term, the government insurance option then becomes a single payer monopoly!!! **Voyager is simply wrong!** Voyager attempted to evoke emotional jealousy to create scapegoats for problems with todays American Health care costs and engender support for Health care reform. Attacking profits and CEO compensation is direct from the Carl Marx play book. Voyager , therefore, is a socialist and Marxist. These profits and salaries are the carrots that motivate excellence in America’s private Health Care system as it does in any capitalistic endeavor. Voyager and the government wish to eliminate the smartest people in management and in the investor community so that a government run health care plan will appear the best that can be obtained. It is preposterous notion that Profits and CEO compensation are the reason for high health care costs! Law enforcement officials said it’s just one of the many widespread, organized and lucrative schemes to [bilk Medicare out of an estimated $60 billion dollars a year](http://www.msnbc.msn.com/id/22184921) and [FY 2006 - Medicare budget is $325 billion](http://useconomy.about.com/od/fy2008budget/p/2008_Mandatory.htm). and the US GDP is $13.48 trillion and Health care is 17% GDP. $12 billion profit is 0.5% of health care costs. $60 billion Fraud is 18.4% of Medicare health care costs. Profit and CEO compensation is a clear indication that fraud is not a cost factor in private insurance. Fraudulent insurance claims reduce profit and reduced profit reduces CEO compensation. **The government needs to get its own health care system under control before it can have any legitimacy to chastise the private health care industry!!!** > [@Voyager](#): > > My body shop has a more efficient connection to the insurance company than my doctor does! **And Voyager thinks that his car body and that thing that is keeping up his head are comparable!!!** > [@athelas](#): > > 11% of K-12 students attend private schools rather than the public option even though the public option is free while private schools have an average tuition of over $8K. > [@cosmosdan](#): > > the fact is modern democracies with UHC also have private insurers that make a profit. So, where any bit of evidence UHC would eliminate the private option. . **The evidence is in athelas statement. 89% K-12 students use the Public school option. A Public health insurance option will eliminate 89% of the private insurance companies!!! That means that 209,000 that now work for the private insurance companies would have to become federal employees to administer public insurance to provide public oversight and management of the health care industry. [Data is form here.](http://money.cnn.com/magazines/fortune/fortune500/2008/industries/223/index.html)** > [@cosmosdan](#): > > I’m just a working stiff and I never had a lot of options. I got whatever insurance my employer offered end of story. **Employers compete in the industry for talent. Good talent will make or break an Employer. Employers offer differing health care plans just to attract the best talent. If you are good at what you do find a new employer. If not then get better at what you do then find a new employer! Mediocrity is a bitch.** > [@Voyager](#): > > The one place where there will be a subsidy to a public plan is the subsidy for those who cannot afford insurance. That will build the customer case and improve efficiency. **There exists a government plan for those who cannot afford insurance. Fix the existing government plan by ending rampant fraud. Fraud does not exist in the private plans that is one reason why they have big payrolls and have a profit. Efficiency of the private plans is not broken so don’t fix it. Leave my insurance alone!!!** > [@elucidator](#): > > **there are pieces missing** , pieces I’m not sure can be quantified. > [@elucidator](#): > > But you can sue! Well, that’s another place I’d like to see some reliable statistics: And then, of course, there’s the people who cannot afford any health insurance at all. **Tort reform has reduced health care costs!** “Evidence from the states indicates that [premiums for malpractice insurance are lower when tort liability is restricted](http://www.policyalmanac.org/health/archive/medical_malpractice_cbo.shtml) than they would be otherwise. But even large savings in premiums can have only a small direct impact on health care spending–private or governmental–because malpractice costs account for less than 2 percent of that spending” "Research suggests that the noneconomic caps led to a [“large decline in losses for both general and medical malpractice insurance”](http://uspolitics.about.com/od/healthcare/a/01_tort_reform.htm); “increased profitability for insurers” “According to a recent article in the New York Times, physicians are flooding into Texas because of the state’s recent approval of a constitutional amendment limiting medical malpractice awards. Further, physicians noticed that the state of [Texas experienced an average 21.3% decrease in medical malpractice insurance premiums](http://www.injuryboard.com/help-center/articles/tort-reform-and-the-effect-of-medical-malpractice-caps.aspx)during the four years following the tort reform legislation.” **If politicians would do what we pay them to do, understand benefits of tort reform and police Medicare, We the People would save 5.2% on total health care costs today!!!** Tort reform of 2% + Medicare fraud of 3.2% = 5.2% total cost reduction. 5.2% of $2.291 trillion would be $119 billion dollars of savings And if Medicare fraud was eliminated then the [people denied needed health care in public sector would be reduced from 6.4% to the 4.4% enjoyed by private insurance purchasers](http://www.meps.ahrq.gov/mepsweb/data_stats/summ_tables/hc/acc/2006/acctocare_4_2_2006.htm). \*\*This one piece of data, from the governments own statistics collection agency, reveals that the government’s (Obama) claim that a government run health care system would reduce the number of people denied medical service is false. \*\* > [@](#): > > My Dear Mr. President, > > The White house has a web site which are distortions and misinformation regarding Health care reform.. > > **Reality** , in everyday usage, means “the state of things as they actually exist.” > Health insurance reform is not a reality so watching the videos may give it an appearance of reality but it is still not real! What is real is that these videos are appeals to emotion without substance or facts just words about other words. > A marketing sales pitch that is patterned after evening TV reality shows is just for entertainment and does not provide a basis for sound decision making. > > Changing the marketing pitch from ‘Health care reform’ to ‘Health insurance reform’ begs the question “Do you even know what you are selling” It is health care not health insurance where the 90% of the US expenditures in the medical service industries occur. So saving 10% of 10% or 1% is so much mental masturbation at the least or just plain and simple fascism at the despicable worst. > > I want facts and figures and statistics not shadows and illusions! > I want summary tables and trend line graphs and a concise encapsulation of the history of American Health Care services industry! > I want cold hard data not opinion and interpretation and spin! > I want the clear light of day to shine on Americas Health care system and not cold studio lights shinning on actors wearing facial masks. > **I demand to see the data!!!** > > As a Health Care customer. > I want to know all the places where I can get medical service. > How much it costs to get medical service at each of those places. > What type of medical service can I obtain. > What are the alternative ways to pay for medical service. > **I demand to see the data!!!** > > As a concerned citizen > I want to know who has been denied medical service. > I want to know how many people have been denied insurance because of preexisting conditions. > I want to know how medical care is bankrupting our nation’s families. > I want to know how many people insurance has been dropped.. > I want to know how the soaring cost of medical care is crippling our economy > I want to know how medical care is becoming an unsustainable financial burden for American employers > I want to know the increase in out of pocket costs > I want to know how In the last eight years, health care premiums have grown four times faster than wages" > I want to know the nearly 46 million uninsured Americans > I want to know how many people can’t afford insurance. > I want to know how you know the status quo is unsustainable. > **I demand to see the data!!!** > > As a taxpayer > I want to be able to study the data, learn how the data was obtained, trend the data to the future. > I want to know why reform is necessary and be able to judge for myself how much reform is needed. > I want to separate peoples wants from peoples needs. > I will pay for what people need but I will not pay for what people want. > Your Universal Health Insurance reform encompasses all aspects of the medical services industry. > The medical service industry comprises some 17% of the economy in every city and town in America. > Why fix something universally when all things in the universe are not broken? > I want to be able to justify a cost of trillions of dollars objectively and logically. > **I demand to see the data!!!** > > There is no information in some staged and choreographed celluloid dramatic video. > The data is the reality!!! Check the data then act!!! > **I demand to see the data!!!** > > The web site [http://www.whitehouse.gov/realitycheck/](http://www.whitehouse.gov/realitycheck/) is “wagging the dog” and has been ignored. > And until the data is provided I remain a staunch and vocal opponent to any universal health care reform. > **I demand to see the data!!!** > > Before we act out of fear with ‘Hope’ > and Before we go head long into ‘Change’ > Do not listen to the likes of DigitalC, Gam Zeh Yaavor, Voyager, TheMadHun, and elucidator but rather: > > 1. Compile facts on true state of medical service industry, public and private > 2. Set up Medical Services Information Agency > 3. From this compendium propose changes to meet objectives > 4. And reduce medical service costs making it more affordable > > Medical services comprising 16% of GDP demands an Information Agency much like the [Energy Information Agency](http://www.eia.doe.gov) with easily accessible data tables indexed by state, service types, consumption, supply, and etc Work smarter not harder! > **I demand to see the data!!!** > > [I found some data](http://www.meps.ahrq.gov/mepsweb/data_stats/quick_tables_search.jsp?component=1&subcomponent=0) > > Your claims are not substantiated and [public insurance ranks worse than private insurance in case of denied medical service](http://www.meps.ahrq.gov/mepsweb/data_stats/summ_tables/hc/acc/2006/acctocare_4_2_2006.htm) > > This site reveals the American medical services industry from a household viewpoint (data is anecdotal) > This site does not show the American medical services industry from the providers viewpoint. (actual costs, income, consumption, demand, supply, etc) > **I demand to see all the data!!!** > > I am sure that I could find hundreds of laws written over hundreds of years where the government made up of very fine men working for We The People protected consumers while promoting the free market of medical services and health care with eye toward reducing costs through competition, yet Mr. President, you seem to be not of that ilk, a lesser man, and with the stroke of your pen all of that fine work is to be thrown in the fire by establishing a bankrupting monopolistic medic-ocracy! ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [August 18, 2009, 9:06am UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/52 "2009-08-18T09:06:31Z")
> [@Indistinguishable](#): > > But as **Rysto** closed by saying, surely the way to maintain the same number of units sold is to maintain the same price? It’s not like the “demand curve” will change in response to the change in the suppliers’ fixed costs. **Fotheringay-Phipps** is actually being more subtly manipulative than that. In a competitive market, it’s true that **Rysto** ’s calculus doesn’t actually work. Or rather, it works only to determine the optimum output of a single firm, not considering the market as a whole. Firms are price takers in that system, and **F-P** is actually correct to point out that the firms put out of business by a large increase in fixed costs would shift the _market_ supply curve, which would raise market price and decrease market quantity. (Each individual firm would be operating at a higher volume, but the market as a whole would produce less.) But of course, the insurance industry is not competitive. Barriers to entry are high, and many insurance markets are provided by monopolies or near-monopolies. More competition could do a world of good with such a market structure. This is why the only arguments against a public plan are ideological hypotheticals about the government boogity-boogity-boo. Which is ridiculous, given the craptacular nature of our current system. Even a somewhat bloated government system like the UK’s is fantastically more efficient than what we have right now. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [August 18, 2009, 2:10pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/53 "2009-08-18T14:10:51Z")
> [@Hellestal](#): > > But of course, the insurance industry is not competitive. Barriers to entry are high, and many insurance markets are provided by monopolies or near-monopolies. More competition could do a world of good with such a market structure. You seem to have lost track of what this discussion is about. We are not discussing the economics of the insurance industry. We are discussing the economics of health care providers, e.g. doctors, hospitals, labs etc. The question is whether an increase in their costs will ultimately be passed on to health care consumers. My position, again, was that if the government forces these providers to accept a lower level of reimbursement from a government plan, this represents a cost that would be passed on to others whose fees were not being regulated. ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [August 18, 2009, 4:36pm UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/54 "2009-08-18T16:36:38Z")
> [@Fotheringay-Phipps](#): > > My position, again, was that if the government forces these providers to accept a lower level of reimbursement from a government plan, this represents a cost that would be passed on to others whose fees were not being regulated. That’s potentially true, although the argument as you previously laid it out is a little rough. You’re still relying on a “market supply”, which is a hazy concept for health care providers, who tend in operate in somewhat non-competitive conditions. But the gist is at least clear. If the system is designed to be unfair, then the system won’t be fair. Okay, then. But for those of us who don’t have an ideological compulsion to believe in inevitable unfairness, this isn’t especially convincing. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 19, 2009, 1:22am UTC](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079/55 "2009-08-19T01:22:46Z")
The insurance companies suck 30 to 35 percent of the healtcare costs and provide nothing…unless you believe fighting their customers over coverage and fighting the hospitals and doctors is valuable . [Previous page](https://boards.straightdope.com/t/will-a-public-option-kill-private-insurance/506079.md?page=2)