Unfair Competition In Health Care

"Regardless of how it was structured or administered, such a government-run plan would have an inherent advantage in the marketplace because it ultimately could be subsidized by American taxpayers. The government plan could keep its premiums artificially low or offer extra benefits since it could turn to the U.S. Treasury to cover any shortfalls. Consumers naturally would be attracted to the lower-cost, higher-benefit government program, thus undercutting the private market.

A government program also would have an advantage since its enormous market presence would allow it to impose much lower reimbursement rates on doctors and hospitals the way Medicare and Medicaid do today. Providers would shift their costs to private insurance, driving up premiums, making private insurance even less competitive with the taxpayer-subsidized public plan.

...To see how this would work, one need only look to other areas where the government has set up insurance programs "in competition" with private insurance, such as crop insurance, flood insurance or some workers' compensation plans. The government programs have squeezed out private competition."

Read the complete article by Michael D. Tanner here.