Balto Annotation

Balto, David. "Why a Public Health Insurance Option is Essential." Health Affairs: The Policy Journal of the Health Sphere. 17 Sept. 2009. Web. 11 Nov 2009.

David Balto is a fellow at the Center for American Progress, a progressive research institute whose mission, according to its website, "is to advance and support a progressive national policy agenda and lay out our vision of a progressive America." According to his bio, Mr. Balto's work focuses on "competition policy, intellectual property law, and health care."

According to Balto, the problem with our current private health insurance system, and the reason why we need a public option, centers around issues of competition. His central claim is that currently, there is not enough competition in the private health insurance industry to ensure "consumer choice" and "honest competition." Balto argues that the high level of consolidation has occurred because barriers to entry in the health insurance industry are high and because existing insurers have set up provider networks with doctors that make it difficult for new insurers to get a foothold. He argues that a public option is the best way of countering the problem of consolidation because a public plan will, de facto, be able to enter all health care markets and because public plans have lower administrative costs and no imperative to turn a profit, thus, they will stir up the pot and create greater efficiency and more affordability in highly consolidated private markets. Additionally, he points out, a public plan will do a better job of following regulations and lead the way towards greater consumer protections.

Balto's argument assumes the importance of market-based concepts such as "competition" and "choice." He is speaking the conservative's language. One major concern I have with his argument: if private insurers have been constrained, by state or federal legislation, in entering new markets (i.e. across borders), then Balto's entire argument crumbles. The consolidation, then, is the result of regulation and policy and not monopolistic or collusive behavior on the part of private insurers. I'll need to look into this a bit more to try to gauge whether the causes of consolidation really are what he claims they are. One person who responded to Balto's piece wrote: "the easy answer is to open up the borders and sell policies across state lines. Get rid of all those junky minimum requirements that state legislatures insist are necessary but fail to deliver value... just cost." This respondent suggests that Balto may be applying selective vision when bullet-pointing the causes of consolidation in the private health care market.