Focus on the paragraph I placed in bold. The conservative position is questionable at best. The liberal position is simply not logical. Lack of competition is not the issue.
The performance of private insurance companies is based on a market that is flawed; especially all the elements of adverse selection (people in need of health care enrolling and healthy people not enrolling). A government-run option would not change that. If insurers are making little or no money at current premiums, a government plan would have the same costs and would have the same premiums or lose money. While the government could claim to be non-profit, that does not change the basic costs associated with the health care services incurred by the insured or the related administrative costs.
The only way a public option could have lower health care costs is by using some form of rationing care or by enrolling a greater portion of the healthy population.
WASHINGTON — The latest turmoil in health insurance marketplaces created by the Affordable Care Act has emboldened advocates on both sides of the political spectrum, providing ammunition to conservatives who want to shrink the federal role and liberals who want to expand it.
UnitedHealth Group rattled federal officials when it announced last week that it was losing money in the insurance exchanges, saw no reason to expect improvements in 2016 and might pull out in 2017. Those concerns followed the collapse of 12 of the 23 nonprofit insurance cooperatives created with federal loans under the health law.
In addition, insurance markets in many states are unstable. Premiums are volatile. Insurers say their new customers have been sicker than expected. And the law is as divisive as ever. In the latest poll by the Kaiser Family Foundation, people reporting unfavorable views of the law outnumbered those with favorable ones, 45 percent to 38 percent.
Conservatives take the trends as confirmation of their pessimistic forecasts, another reason to repeal as much of the Affordable Care Act as they can. Liberals, on the other hand, say the uneven performance of private insurers strengthens the case they made unsuccessfully in 2009-10 for a “public option” — a government-run health plan that would compete with private insurers.
Though it still represents just a small portion of the privately insured marketplace, Affordable Care Act exchange business was unprofitable for most health insurers in 2014 and will likely be in 2015, according to a new report from Standard & Poor’s.