The dangers of the public plan

Ezra writes:

Paul Starr has an important column
today on the dangers of a badly designed public plan. The issue
essentially comes down to adverse selection. If the public plan becomes
a dumping ground for the sick and the old, it will be too costly for
the young and the healthy. Rates will go up, and conservatives will
point to the plans as costing X percent more than private insurance,
thus proving the inefficiency of the government.

That's exactly right I think, although I suspect Ezra sees it differently.  I've still yet to see good reasons for expecting any equilibrium other than that one as outlined.  I should add that some or maybe all defenders of the public plan can consider that an acceptable outcome: spend more money to cover more people and of course mostly from high-risk groups.  But that's what it boils down to, not some kind of magical competition which will allow us to save on general health care costs without cutting back on real health care treatments.

Here are my previous posts on the public plan, see the first two links


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