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Tuesday, October 20, 2009

Small Biz Health Care Daily: Democrats Wrestling with Government Plan

The push for a new government-run health care plan continues. As negotiations proceed in the Senate, the New York Times on October 20 reported:

One participant, Senator Max Baucus, Democrat of Montana, and chairman of the Finance Committee, said senators were considering new ideas to finesse disagreements over whether the government should offer its own health insurance plan, in competition with private insurers. Under one proposal, he said, the government would create a public plan, but states could “opt out” if they wanted to devise and operate their own insurance programs.

An old saying pops to mind: You can put lipstick on a pig, but it’s still a pig.

Government run health insurance will not provide competition in order to keep private insurers honest, as supporters proclaim. Instead, a new government program will only serve to jack up costs for taxpayers – both individuals and businesses – and drive insurers from the market due to enhanced mandates, rule and regulations, which will, in turn, drive costs even higher. In the end, it does not matter if government-run plans are operated by the federal government or by state governments. The same perverse, counterproductive incentives exist either way.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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