Public Insurance Isn't Coming, It's Been Here for Years

Note to critics of the public plan option for health insurance: This debate is over. You lost. In 2007, more than 45 percent of all medical costs in the U.S. were paid by government, vastly more than the one-third funded by private insurance.   

Many Americans already have access to public coverage. There is Medicare for those over 65, Medicaid for the poor, SCHIP for kids, coverage for the active military, and for many veterans. Together, the share of medical spending paid by government has grown from one-third in 1970 to nearly half today, according to the Current Population Survey. If your definition of “public plan” includes insurance available through highly-regulated private carriers to federal, state, and local employees, the numbers are even bigger. And, of course, there is the quarter-trillion dollar government tax subsidy for health insurance.  

But even using the most narrow definition—those getting direct government coverage– more than 80 million Americans already have such insurance. That’s half as many as have employer-sponsored insurance, but it’s still a lot of policies.   

Of course, among those 65 and older, far more have Medicare than have private coverage (many have both). Nearly a quarter of all children under 18 are covered by the government.

Public plans have been a pillar of health insurance in the U.S. since the 1960s. We can have a perfectly good argument about whether these plans work as well as they should, whether there are markets where private insurance is more appropriate than public coverage, or how we should structure a public plan. But talking about government coverage as if it is the insurance equivalent of a four-leaf clover is just bizarre.  

It is especially odd to hear the American Medical Association grumble about public insurance. Back in the 60s, the AMA opposed creation of Medicare and Medicaid, never imagining that government would pay about one-quarter of the cost of physician office vists and clinical services as it does today.

It is no surprise that critics of health reform would revive the old Harry and Louise argument that government is trying to take over your health care. But if that’s a problem, it has been one for decades.