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The Left’s ‘public option’ is no option

July 31, 2009 | By Amanda Reinecker

"Americans just aren't buying President Obama's all gain, no pain, health care claims," Heritage Foundation expert Conn Carroll reports. That's because more and more Americans are finding that President Obama's "public option" would be, as Heritage President Ed Feulner writes in Townhall.com, the "only 'option.'"

The "public option" would be a government-run health insurance company that would "compete" with other firms. But it wouldn't be just another insurance company.

"Far from being merely an option," Heritage Vice President Stuart Butler explains, "a Medicare-style public plan would unleash a dynamic that is not what Americans thought they were voting for last November."

Government's dueling roles as health insurer and health insurance regulator would give the "public option" an unfair leg up on its competition, suffocating private firms and forcing millions of Americans onto government rolls.

It's no secret that some lawmakers support the "public option" exactly because it could effectively nationalize the health insurance industry, creating a single-payer system where government is the sole provider. In an impromptu interview, Rep. Barney Frank (D-MA) admitted, "I think if we get a good public option, it could lead to single payer."

But many other lawmakers, including many Democrats, are hesitant to support such a radical plan. Butler attributes this to the age-old fact that more government "turns out not to be a selling point" among most Americans. Facing strong resistance, both the House and Senate are defying President Obama's wishes and postponing a health care vote until after the August recess.

The conservative alternative

If they don't get their way, the Left threatens to "torpedo reform" of any sort. This could stymie even common-sense conservative reforms.

The Heritage Foundation alternative to socialized medicine is to enact serious reforms in current tax and insurance law that would expand personal ownership and control of health insurance and transfer the control of health care dollars to individuals and families.

These reforms would move today's bureaucracy-driven, heavily regulated third-party payment system to a new patient-centered system of consumer choice and real free-market competition.

One plan, the Patients' Choice Act of 2009, would expand individual control over their health care dollars. The plan, as Heritage experts Greg D'Angelo, Rea Hederman and Paul Winfree explain, would provide a new health care tax credit of $2,290 for individuals and $5,710 for families. This would allow Americans to buy health insurance with pre-tax dollars, even if their employer doesn't offer coverage, and take their plan with them from job to job.

This change "would not only help the middle class buy insurance and extend coverage to the uninsured," they argue. "It would also set in place powerful incentives to reduce the rapid growth in health care expenditures."

» Visit Heritage's FixHealthCarePolicy.com to learn more about our conservative alternatives

It's time for Congress to start listening to the people and devise real health care reform that advances freedom, opportunity, prosperity and civil society. As Heritage's Stuart Butler argues, "it's time for President Obama to pull the plug on the public option."

Other Heritage work of note

  • "Our government is writing checks to 'stimulate' our economy, although nobody knows how we're going to pay for it all," writes Heritage's Israel Ortega. Congress is rapidly proposing and passing massive legislation laced with enticing but empty promises that do little more than "add to our national debt and effectively reduce our freedoms." They undermine the very principles that make America so great.
  • Hidden in the 1,427-page cap-and-trade climate change bill are protectionist carbon tariff provisions that have rightly caused a ruckus abroad. This "inconvenient tariff" would apply to carbon-intense imports, hindering free enterprise, raising prices for consumers and raising the specter of retaliation against American exports. "As if the economic perils of cap and trade weren't bad enough," explains Heritage energy policy expert Nick Lorris, the tariff would "severely hinder free trade…a fundamental aspect of prosperity."
  • Writing for Global Security.org, Heritage homeland security expert James Carafano highlights his recent article about how Twitter, the social networking service, influenced Iran's election protests and helped bring the crisis to the global forefront. "The cyber activism surrounding the Iranian protests was unprecedented, driving the global debate while governments and the established media struggled to keep pace," writes Carafano. He suggests a "national agenda to make the federal government better prepared to employ Web 2.0 technologies during a national crisis."

In other news

  • Lawmakers may suspend the "Cash for Clunkers" programs, through which the government buys used cars with other people's money, because it has run through its original $1 billion budget. A fiscally responsible Congress might call an end to the program, though lawmakers are already working to extend the funding.
  • We inadvertently misspelled Heritage expert Brian Riedl's name in Wednesday's message.

Coming up at Heritage

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Amanda Reinecker is a writer for MyHeritage.org—a website for members and supporters of The Heritage Foundation. Nathaniel Ward, the Editor of MyHeritage.org, contributed to this report.