Senate Health Bill: A Trillion-Dollar Federal Takeover

This brings us to the second major change made to AHCA: creating a government-run “public option” that allows uninsured individuals -- or, say, workers whose employer decided to save a few thousand dollars by trimming benefits -- to go to the federal government for coverage. With a government-backed program waiting with open arms to scoop up any and all comers, whether they are currently insured or not, employers can comfortably know their workers will be covered even while their businesses save thousands per head by ending their funding of that coverage.

This is one of the many reasons a government-run insurance “option,” which prominent Democrats like Senate Finance Committee member Charles Schumer (D-NY) are so forcefully supporting, is a danger to the health care market as we know it. The “public option” is designed to enter a government-run insurance provider into open competition with private coverage-providing entities. Though politicians from the president down have been insistent about their intention to have that competition take place on a “level playing field,” promises like that from a federal entity that makes the laws, prints the money, and -- perhaps most importantly –- doesn’t have to make a profit to stay in business ring very hollow indeed.

All proponents of this government-run insurance program may not share the views of Rep. Jan Schakowsky (D-IL), who earlier this year promised a group of pro-socialized medicine activists that a public option was being established as a means of imposing “single payer” (read: government-run) health care on America and assured her audience that the federal government wasn’t interested in waging a “principled fight.” Kennedy and Dodd specifically told their colleagues in a letter released to the press that the AHCA “virtually eliminates” the likelihood employers will respond to the availability of a government-run insurance option by dropping funding for employee coverage. However, the consequences of this bill are plain to see, even if these U.S. senators aren’t capable of understanding (or of honestly explaining) the consequences of their legislative actions.

Health care consulting and analysis firm Health Systems Innovations, which analyzed the AHCA in June, estimated that the government-run insurance option provision would “likely crowd out 79 million individual contracts with existing private insurers.” HSI also estimated that the entire bill would cost at least $4 trillion to implement -- nearly three times the CBO’s estimate.

This massive move by the federal government to crowd private insurers out of the market through the imposition of a national employer mandate and the establishment of a government-run insurance option would be, as Schakowsky eagerly predicted, the end of the private health care market as we know it. Whether it comes as an unintended consequence of actions taken by legislators who are too short-sighted to see the havoc their bill will wreak on our health care system, or as a significant milestone in an intentional takeover of the private market, the result will be the same.

And it will not be positive in any sense of the word.