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ThoughtsOnline

Thursday, October 29, 2009


I don't know if (1) a health care bill will ever pass, (2) if one does, whether it will include a so-called 'public option', (3) if it does, whether there will an 'opt-out' provision by which individual states can decide to not participate... but I can guarantee that if it does, NOT A SINGLE STATE WILL EVER DO SO.

And not because, as some claim, because the rules are stacked against states wishing to opt out... but rather because (1) the public option will offer cheaper rates making it hard for state politicians to deny their residents the opportunity to get health insurance for less money, (2) those lower rates will be made possible by a combination of higher taxes and health insurance premiums, and (3) because those higher rates and taxes will hit the residents of a state whether or not that state offers a public option, state legislatures will most definitely figure that participating at least allows their residents to get back a portion of those higher taxes and premiums.

Opting out of the public option would be as fiscally silly as a state announcing they didn't want any military bases or defense contracts awarded to state firms. Their residents would still have to pay the taxes to pay for defense spending, so lobbying for defense dollars is simply the best way for a state to minimize the net outflow of its residents' tax dollars.

The only way an opt out works is if everybody opts out. But so long as just one state offers a public option, every other state is stuck with having to take do the same lest their residents tax dollars go to support the lower rates in the states offering the public option.