Matt Rognlie Doesn't Understand the Public Option

| About: iShares U.S. (IYH)

By Kindred Winecoff

Neither do I. He says it all in one paragraph:

The adverse selection problem here is so overwhelming that there is almost certainly no price at which the government can break even. But this will only be discovered after the public plan has already swung into operation, and millions of people have signed up. What does the government do now? Throw up its hands, announce that the plan isn't solvent, and force millions of customers who have placed their trust in the public plan to join the ranks of the uninsured? Of course not. Subsidies are inevitable.

There is more at the link. Of course everyone who supports a public option also supports some version of single-payer, so for them Rognlie's argument is not troublesome. (Perhaps it is not troublesome for Rognlie either; he doesn't say.) And people who oppose single-payer understand perfectly well that a public "option" is basically a Trojan horse towards that end. This is well understood by anyone who has thought about it.

(It should be instructive that Walmart is a strong proponent of the public option, since it will not only move many of their employees onto the dole, but also subsidize many more potential customers.)

But basically Matt is saying that would-be reformers cannot have it both ways: there will be large costs for any meaningful reform. If you want the reforms anyway, then you must justify the costs. If you can't/won't do that, then you need to abandon the reforms.

Of course, the flipside is also true. If you are unwilling to pay the costs, you must justify why. And nonexistent "death panels" and "Stephen Hawking would be dead" arguments don't count; neither does any phrase that includes the words "Soviet Union". If you oppose reform, you need to make the case that you shouldn't have to pay for other peoples' health care. That's a case that can be made, but you can't do it by accusing gay Jews of being Nazis:

I actually disagree with Frank there. It would be much more beneficial to have that conversation with the dinner table. I mean, seriously. Barney Frank is a Nazi?!? I'm not a super-huge fan of the man, but Nazi is about the last thing I'd call him.