Rep. Ryan Spreads Falsehoods About The Public Option

July 20, 2009 12:05 pm ET

In an Milwauke Journal Sentinel op-ed on July 18, 2009, Rep. Paul Ryan (R-WI) spread numerous falsehoods about a public health insurance option.  In reality, a public option will keep private insurers honest by allowing a public plan to set a benchmark for service and care.

Rep. Ryan Falsely Stated A Public Option Would "Stack The Deck" Against Private Insurers

Rep. Ryan: "A new government-run plan would stack the deck against any would-be competitors. The private sector has to pay taxes; the government collects taxes. The private sector has to account for its employees and benefits, while maintaining minimum reserve requirements; the government does not. The private sector pays whatever rates it negotiates with providers; the government dictates payments." [Ryan op-ed, Milwaukee Journal Sentinel, 7/18/09]

Claims that the public option will put private insurers out of business have been debunked by multiple sources:

President Obama: "That's Not Logical" To Say That A Public Option Will Drive Private Insurers Out Of Business.  At a press conference on June 23, 2009, President Obama said: "Why would it drive private insurers out of business? If private insurers say that the marketplace provides the best quality health care, if they tell us that they're offering a good deal, then why is it that the government -- which they say can't run anything -- suddenly is going to drive them out of business? That's not logical." [Press Conference by the President, 6/23/09]

Los Angeles Times: Public Plans Already Compete With Private Plans And "Set A Benchmark" For Care. The Los Angeles Times said: "The federal government already provides health insurance to about 83 million Americans through Medicare, Medicaid and other public programs, including those offered by the military. Private insurers, meanwhile, face growing criticism for refusing to cover people with preexisting conditions and dropping coverage for sick customers. 'This is a benchmark that will set a high standard that private plans have to meet,' said Jacob Hacker, a political scientist at UC Berkeley who advocates a public option." [Los Angeles Times, 5/10/09]

New York Times: Fears Of A Public Plan Putting Private Plans Out Of Business Are "Overblown." According to the New York Times: "What many critics seem to fear most is that a new public plan would sweep away its private competitors and evolve over time into a full-fledged single-payer system (sometimes called Medicare for all). No matter how fair the competition between public and private plans might be at the start, they warn that the government would find it irresistible to rig the outcome through its regulatory and pricing powers and its ability, in a pinch, to subsidize the public plan with taxpayers' money. That fear seems overblown. Innovative, nimble private plans with well-integrated service systems might outperform any government plan, just as some now outperform Medicare through better coordination of services, stronger preventive care and broader benefits. A new public plan is neither the cornerstone of health care reform nor the death knell of private insurance. It should be tried as one element of comprehensive reform." [New York Times, 4/6/09; emphasis added]

Center For American Progress: Many States Run Public And Private Plans Alongside Each Other Successfully. According to the Center for American Progress: "Today, state governments (all of which regulate insurance companies) operate public Medicaid programs, purchase insurance for thousands of public employees, and regulate insurers. In fact, many states successfully offer their employees and retirees private health insurance plans side-by-side with these states' self-funded health insurance plans." [Center for American Progress, March 2009]

Economic Policy Institute: In Uncertain Economic Times, A Public Plan Is "Backup Insurance" For The United States' Largely Employer-Based Insurance System. According to the Economic Policy Institute: "Another reason that the health system needs a public health insurance option is that it serves as backup insurance for all Americans. While a majority of Americans are covered by employer-sponsored health insurance, many do not have access. Even among full-time workers, 17% do not have insurance. Furthermore, many people lose coverage each year when they leave their jobs and then pick it up again at a later time, spending at least brief time periods without insurance. Aside from the risks of being uninsured, these individuals and families also must deal with the disruption of changing providers, and the lack of continuity in their care. Though employer-sponsored health insurance is the backbone of the American health insurance system, it is not an effective backstop particularly in this time of high unemployment. A public health insurance option would offer a plan Americans could depend on." [, 5/13/09]

The Public Option Would "Keep The Private Sector Honest"

President Obama: "Keep The Private Sector Honest, Because There's Some Competition Out There."  During the Health Care Summit at the White House, Senator Grassley commented to President Obama, "there's a lot of us that feel that the public option that the government is an unfair competitor and that we're going to get an awful lot of crowd out, and we have to keep what we have now strong, and make it stronger." President Obama replied: "The thinking on the public option has been that it gives consumers more choices, and it helps give -- keep the private sector honest, because there's some competition out there. That's been the thinking. [Health Care Summit, Transcript via Talking Points Memo, 3/5/09]

"A Public Plan Would Provide An Essential Option" For Americans.  Harold Pollack, public health policy researcher at the University of Chicago's School of Social Service Administration and faculty chair of the Center for Health Administration Studies, wrote in an op-ed: "A public plan would provide an essential option--and an equally essential backup--for millions of Americans living with chronic illnesses or disabilities." [The New Republic, 3/10/09]

Sen. Baucus: The Reformed Health Care System "Will Be A Public/Private Hybrid." The American Prospect published a quote of Senator Baucus saying: "We need health insurer reform to get rid of preexisting conditions and other ways insurers discriminate. That's part of our plan here, and the CEOs of many larger insurance companies are on board. They know this change is coming. They may lose the current model but they pick up on volume with 46 million people coming into the system...And that will be a public/private hybrid. There may come a time when we can push for single payer. But that time is not yet, and so I'm not going to waste my time." [The American Prospect, accessed 3/6/09]