Heritage on Health Care

I noticed this Reuters article on the coming health care battle while at work yesterday.  Reuters mentions the proposed “public plan” and Heritage analyst Robert Moffit responds:

Robert Moffit, a health policy expert at the conservative Heritage Foundation think tank, said he believes some proponents of a new public program see it as a first step toward a full government takeover of the healthcare system.

“It’s a Trojan Horse for national health insurance where you basically rig the competition against private health insurance and you set up the economic incentives to encourage employers to dump people into the public plan,” Moffit said.

The concern is that a public plan would either offer more benefits or charge a lower premium for insurance, undercutting all private competition and making up its revenue shortfall with subsidies.  This is simply a slower way of killing the private system – slower than banning (as previously in Canada) or making it redundant with universal government insurance (elsewhere).  It isn’t likely that a government plan advanced for political purposes and unconstrained by budgetary limits or profit incentives would offer more expensive health care with fewer benefits – what constituent would be impressed?

But the plan leaves out what, to my untrained eye, seems even more insidious – the demand that all plans (including the public one) cover pre-existing conditions.  While a public plan would slowly strangle competition in the health care market, public plan coverage of pre-existing conditions will instantly create de-facto universal insurance.  Since anyone can sign up for (cheap, subsidized?) government insurance after they get sick, it would be a waste to pay for a (public or private) policy while still healthy.  Perhaps this particular proposal is just too outlandish to ever pass, or perhaps I don’t understand it properly.  But it bothers and worries me that such a disastrous measure has disappeared in the greater flood of complaints against the Obama health care proposal.

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