Chicago Tribune: The public option -- no way, no how

For months, it wasn't clear what was in or out of the massive and expensive health care bills moving through the U.S. House and Senate. Now it is.

House Speaker Nancy Pelosi unveiled an $894 billion measure last week that would dramatically reshape health care in America.

You don't have to read all 1,990 pages to know what's wrong: This bill, like a similar Senate measure unveiled earlier by Senate Majority Leader Harry Reid, would put the government in direct competition with your health insurance company. It creates a new government-operated health insurance plan, going head-to-head with coverage from private insurers.

That's what the policy wonks call a "public option," as in, certain citizens would have the option of buying insurance from a public source.

It's a deal-breaker. Both bills should be rejected.

Pelosi & Co. say their proposal won't drive private insurers out of business because -- ta da! -- doctors and hospitals will be able to negotiate their rates with the government plan. She says the government won't bigfoot them, as it does in Medicare, paying bare-bones reimbursements to health providers.

Please.

Medicare chisels doctors and hospitals. They make up the difference by charging higher prices to people covered by private insurance. So you -- or you and your employer -- pay high premiums for that private insurance. One industry exec estimates the cost shift at $89 billion a year.

If a new government-backed plan tries the same dodge, then why would any doctors or hospitals sign up to treat government-insured patients? No doctors equals no patients equals no citizens choosing the public option.

If the government pays the same rates as private insurers, it loses its competitive edge against private carriers. Again, why would citizens choose public insurance?

That's why it is far more likely that Democratic leaders and President Obama will make sure a government plan enjoys a huge advantage over private companies. The federal government will find ways to control health prices or regulate private insurers. The bigger the advantage the government creates for a federal plan, the more likely it will undercut private carriers and force them out of business.

If this plan were to morph into something like Medicare, as many as 119 million of the 172 million Americans who are privately insured would switch from private to public coverage, according to an analysis by the Lewin Group, a health care consulting firm. R.I.P., private insurance.

Obama and Democratic leaders promise, implausibly, that a new government plan will increase competition and keep private insurers honest.

But government doesn't compete. It overwhelms. It has the power to set prices, control costs, and squelch innovation and competition. And if it goes over budget? Well, just watch what happens with Medicare. One part of Medicare will be insolvent in 2017 if nothing is done.

Something will be done. Keep an eye on your wallet, taxpayer.

Ditto a new public plan. If it gets into trouble by charging too little to cover its expenses, the execs running the plan probably won't hike rates on customers. They'll go running to Uncle Sam.

The government has shown over the past decades that it can spend prodigious amounts of money for health care. But it hasn't shown that it can update and streamline its plodding fee-for-service system.

Or stop losing billions to fraud and waste. Or resist political pressure to spend even more.

Case in point: For the last several years, Medicare has tried to impose Congress-mandated cuts to doctors' fees. But then the doctors howl. And Congress buckles. And the cuts get rescinded.

Creating another federal health care program is a huge -- and expensive -- step toward handing the government complete control of Americans' health care.

Health care costs do need to be tamed. But this is the wrong prescription. We urge both houses of Congress to vote against a public option sure to limit Americans' options.