Why do I hear the "Imperial March" in my head when I read this article?

I could not even come close to summing up the issues with Obama's plan for health care as well as Ronald Bailey did, so I won't even try.

It does, however, express my sentiments exactly.


Here are the highlights:

The Lewin Group crunched the numbers through their health care model and found that premiums for the public option plan would be 30 to 40 percent lower than private plans. Sounds great, right? But these lower premiums are essentially achieved by imposing price controls. The Lewin Group assumed that the public option plan will pay doctors and hospitals at the same rates they currently receive from Medicare. And Medicare reimbursements already run 71 percent and 81 percent below what private health plans pay hospitals and doctors, respectively.

First, the somewhat good news. Lower public option premiums and an increase in Medicaid coverage would attract 28 million of the 48 million Americans who currently are not covered by health insurance. Now the bad news. The lower premiums would encourage employers to drop private health insurance and put their employees into the public plan. Overall, the Lewin Group estimates that if Medicare reimbursement rates are imposed, the number of Americans with private health insurance would decline by almost 120 million, leaving only 50 million Americans in the private insurance market.

The best result of creating a parallel public insurance scheme is that the United States would end up with an explicit two-tier medical system in which privately insured Americans have better access to better medical care. Such two-tier health care systems already exist in countries with national health care schemes such as the United Kingdom and Germany. In the United Kingdom, more and more Britons are opting for private health insurance instead of remaining with that country's National Health Service. Privately insured Americans would get higher quality health care, but because the market for medical innovation would be smaller, everybody will get worse care than they would otherwise have received had most health care not been nationalized.

The worst case scenario is that the public option plan would eventually absorb what remains of the private health care system. This could happen as the political constituency for private health care and insurance shrinks while more and more Americans become covered by government insurance. In addition, it will be hard for politicians to resist forcing wealthier patients to join the government plan as a way to make up for eventual shortfalls in revenues.