This public option will supposedly “compete” with private alternatives. As President Obama likes to put it, those who are happy with the insurance they have now can keep it — and if they happen to prefer the government offering, well, gee whiz, that’s the free market at work. The reality is far different. Not only will the new program become the default coverage for the uninsured, but Democrats intend to game the system to precipitate — or if need be, coerce — an exodus to government from private insurance. Soon enough, that will be the only “option” left.
Most hospitals are barely breaking even today. *Successful* hospitals are running on a 1-3% margin. The economy is already putting more strain on the system. IT spends have been shelved… many hospitals are shutting down services, staff cuts abound and many hospitals will likely close.
If that weren’t enough, the government plans on executing their public plan, which will put an estimated 118 million people onto a government run system. The current government system reimburses hospitals at below market rates… and has left it up to the private sector to make up the difference. What will happen if the majority of Americans are insured by a governement controlled, single payer system? Hmm. How many hospitals will be able to stay in business?