Obamacare exchanges are imploding nationwide, and Democratic nominee Hillary Clinton is pushing for a government-run public option as a solution to the failing healthcare system.
It’s hard to imagine a situation in which Obamacare could get any worse: 16 healthcare co-ops have gone under, the Tennessee Health Commissioner is saying the state’s Obamacare exchanges are “very near collapse,” and analysts can’t even fathom a positive future for the system in either the short or long term. (RELATED: Obamacare ‘Near Collapse’ In Tennessee, Says Insurance Regulator)
UnitedHealth Group is exiting 31 of the 34 exchanges in which they participate and Aetna is leaving 11 of its 15 states by the end of 2016. Some 75 percent of exchanges will have narrow insurance options in 2017, a figure up markedly from 64 percent in 2016 and 55 percent in 2015, according to Becker’s Hospital Review. In fact, five states are likely to have just one insurer in 2017, according to the Kaiser Family Foundation.
Hillary Clinton is now addressing these problems on the national campaign stage. She says she will “defend and expand” Obamacare, according to Clinton’s campaign website. Her solution to the mass exodus of insurance companies from the failing exchanges across the nation is to institute a full-scale “public option.” (RELATED: Obama, Former Chief Health Official Already Floating Public Option To Replace Failing Obamacare)
A public option would essentially “be a government-sponsored and government-run insurance plan, probably modeled on the traditional Medicare program, which would be offered to customers on the exchanges as an alternative to the private-insurance plans,” according to AEI.
Backed by taxpayer money, a public option would act in direct competition to private insurance plans on the exchange marketplace. A public option would not be in the business of competing for price equilibrium, as would be the case in any private marketplace where firms vie for competitive advantage in pricing to get the greatest share of the market possible.
Essentially, competition for customers creates better options for consumers in the long-run by giving them the lowest price options possible. Price competition stands in stark contrast to monopolies, where there is just one provider of a good or service, and the firm can charge (in theory) whatever they deem fit. The problems with monopoly-style markets can be observed easily in the recent Mylan EpiPen scandal. (RELATED: The Price Explosion For EpiPen’s Is Linked To One Key Gov’t Decision)
A public option, on the other hand, would be in the business of setting prices (funded by your tax dollars).
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