My brain can’t comprehend what this would do and how it would work. Also, does this lower health care costs? How? Why?
What is this “public option”?
In: 11
In any given population, if your goal is to maximize the proportion of people who are insured, it works best with a highly diversified pool of ‘customers’ because then the probability of an insurer having to pay out a claim is closest to the overall population average. The term “public option” means the government offers a healthcare plan, but it also implies private carriers are also available. (It’s a euphemism designed to make private insurance sound like the default, whereas in most wealthy societies, public is the norm). When multiple providers are available, the rational thing to do for low risk people is to pick an insurer who only serves similarly low-risk people, because then your premiums will be cheaper. That leaves mostly higher risk people paying higher premiums for the public option.
It’s a lot like school systems. Imagine the law said that if your family sends its child(ren) to private school, you don’t have to pay the property taxes that would otherwise fund public schools. What happens is that the rich families do that, which is cool for them, but then everyone else who can’t afford private schools has to pay higher taxes to fund the only schooling they can afford. Over time you end up with a less educated society, and a bigger divide between better and worse educated people. Even the rich lose out, eventually.
The political debate is whether wealthier lower-risk people should “subsidize” higher risk ones.
Latest Answers