I did read HR3200. I didn't see this sort of language, could you link me to it? I understood the public option as being only available through the exchange, and even then only to those meeting specific criteria. I didn't see anything making exchange participation mandatory.
I'm not fantastic at lawyer-speak so maybe you can point me to the specific clause. This stuff should be written in plain language so the public actually understands it!
As for the self-sustaining public option, it would (theoretically) operate more efficiently due to lack of high executive pay, no profit margin necessary, and less need to advertise. In theory, it would force the private insurers to clean up some of the waste and offer lower premiums to compete.
In theory. Of course, the dems' public option is nothing like the one I describe. Theirs is propped up by taxpayers and hardly available to anyone. (or so I thought. i'm hoping BKG can clarify that for me)
Also lug_nut: You're mixing up the insurance mandate with a public option. They're two entirely different things. You can have a public option without a mandate, or you can have a mandate without a public option. Or both. Or neither! (after discussions here I'm leaning towards neither) Replace the words "public option" with "extra insurance company staffed by government employees."
The private insurers already have incentive to clean up waste, fraud, and abuse. It's called the profit incentive. The "self-sustaining public option", as you call it, would be neither self-sustaining nor optional after a period of time.
Businesses are formed in order to make a profit for those who own them, whether it be sole proprietor ship or for stockholders. If you introduce "competition" that is subsidized in such a way that it can undercut those businesses, free market theory dictates that people will move to this cheaper option, if the product is otherwise equal. Further reducing the ability of the private firms by restricting their ability to attract new customers merely quickens this process. Another thing that would hasten it is allowing employers, who now foot most of the bill for health insurance, to have the option to just drop it as a bene altogether and just "pay a fine" that may or may not be greater than the premiums they currently pay.
End effect of all this, the private insurers close their doors because they can't compete and make a profit with existing customers, can't attract new ones, and some customers voluntarily leave, choosing to pay a penalty to lower their own overhead. It could take years, but once it starts, it won't be stopped.
