Sunday, November 29, 2009

Schwartz LTE On Public Option

Brian Schwartz just alerted me to an LTE of his which had been published in the October 30, 2009 Denver Post.

The topic was the so-called "public option":
Health care reform and the public option

Say your neighborhood deli rigged its scales so that customers who paid for a pound of meat left the store with less. Does such fraud justify a government-run "public option" for delicatessens?

Surely not, but this is how Colorado AFL-CIO Director Mike Cerbo argues for a new government-run insurance plan. Cerbo says it should "impermissible" for insurers to "drop coverage due to pre-existing medical conditions" -- presumably when patients had been honest about medical histories.

This is called "post-claim underwriting," and it violates the insurer's contract with the policy-holder. But this is no justification of a "public option." Rather, if it happens frequently and without penalty, it shows that government has been lax in one of its legitimate duties: enforcing contracts.

Brian T. Schwartz, Boulder