I see some problems with your theory which I will outline below:

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Originally posted by Arbiter That seems unlikely. I believe that the administration is seriously underestimating the costs of expanding coverage to those who are presently uninsured. Extending coverage to those presently uninsured will cost more than the current market value of insurance for them because it will increase demand and, since supply is inelastic, therefore the cost of medical services. The only alternative is to regulate the costs of medical services directly, but that will not solve our health care problems; rather, it will only cause supply to further contract, and instead of people having no access to health care because they cannot afford insurance, we will have large numbers of people who have no access to the health care they need because of inadequate supply.

The problem I see with this argument is that you are treating the American health care system as a fungible commodity that is subject to very simplistic free market constraints and efficiencies; something that I consider to not be the case at all. On one aspect you state that the supply of health care is is inelastic ... only as a ratio of expenditures you are correct. There are no shortages of doctors, hospital beds, etc., at least in aggregate. And there is no shortage in demand for health care obviously. IMO the distortions largely come from that which is dictated by the insurance and litigation industries. And a large part is dictated by the insurance industry. The pay that doctors get are standardized by the type of procedure they offer so doctors are always incentivized to prescribe more operations or more exams. Via litigation and the health insurance industry doctors earn more money by prescribing more examinations. It's perverse and it's why our country spends money in health care per capita than any other.

Furthemore we already have a public health option in place. It's called EMTALA which requires emergency rooms to treat patients regardless of citizenship, legal status, or ability to pay. However, since emergency room treatment is substantively more expensive than preventative care, what argument is there to NOT provide preventative care via a public option when not doing so will simply lead to prohibitively more expensive costs via emergency care?

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Moreover, since the plan (effectively) requires people to have insurance, it removes incentives to reduce one's own consumption of health care services. Once a person is insured, the marginal cost of treatment is only their deductible or copayment, and therefore a rational person will be more inclined to seek unnecessary treatments which they would eschew if they had to pay the full cost of the treatment, even if they could afford it. Those currently uninsured have medical conditions for which treatment is required and for which they are unable to pay. That is certainly a problem that would be fixed by the plan, but those same people also have medical conditions for which treatment is optional. Once insured, there will be little incentive for them not to seek treatment for those conditions as well, even though they would not do so if they had to pay the cost themselves, since the marginal cost for such treatment will be low. The result is a tragedy of the commons, where the health care market would operate efficiently to everyone's benefit if such treatments were not purchased, but since each individual can shift the cost of her own treatment to everyone else those benefits are unlikely to be realized. The aggregate demand and cost of health care will increase accordingly, and much of it will be waste.

Do you have employer provided health care? How do you use it? I have employer provided health care and I don't give two shits about rationing/consumption/efficiency, etc. If I have a weird rash I go to the derm ... if I have the most abstract hearing problem I go straight to the ENT ... even if it's not a severe problem (90%) of the time I will go to an expensive specialist. Why? Because employer based health insurance is retarded and has absolutely NOTHING to do with efficiency ... this is based upon personal experience at a number of firms. If I have a problem I dont care about costs because it's always masked via isnurance company procedures.

To me this is a simple argument. ANY argument applied to a public health care option should be equally applicable to Medicare. Fine, you want to get rid of the public option than get rid of Medicare. Arguing for one against the other is obtuse and is discrimantory.

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