One of the more frustrating and senseless arguments against the public option or the single-payer systems is that if enacted, then the private insurers would not be able to compete against the government-run option.
The hand-wringing and self-righteousness of this argument astounds me. You think an industry that has devoted every waking hour to defeating a public option or single-payer system is going to just pick up its ball and go home?
And if the private insurers have to rely on a basically oligolopic industry structure where a radical new competitor can so easily wipe them off the map, then is that an industry we as consumers should be subsidizing with our hard-earned dollars?
Let's use the one talking point I have been able to come up with to counter the private insurers on this particular angle.
We've heard President Obama state how both UPS and FEDEX compete with the U.S. Postal Service, but I think there is a more apt analogy to be used on our behalf.
Retailers across the country, in an effort to reduce costs and increase margins, have increasingly created their own house brands which garner prime shelf space and compete against many big brand consumer products.
Go into any CVS or Walgreens and you can buy generic Tylenol or Advil, generic Claritin, etc... Go into any supermarket and they will have their own brand of bottled water to compete against Dasani or Poland Spring.
The store brands = the public option
And do you see the big brands in those product categories going away? Even when big pharma patents expire and generics can become available those pharma brands are still advertised, right? Coca-Cola and Pepsi are not ceding the field to the store brand, nor are they shut out of the stores by those store brands. This is important; store brands help the store and they are allocated a percentage of shelf space, but the retailer does not lock those big brands out of the store because the consumer is given a CHOICE.
They can go low-price, save as much money as possible down the line in every category there is a store brand. They can go with a mix of store brands and name brand products. Or, if they choose, consumers can buy all name brand products for a premium price.
This same analogy applies to whatever healthcare reform bill emerges if it were to contain a public option.
Everyone shops at the drug store or the supermarket or the big box mass merchant. We see this economic phenomenon at work every day in our normal shopping experiences.
Yet we are being asked to believe that the health insurance retail market would be a complete aberration to what we see playing out in the retail market for most other products. We are being asked to believe that the "generic/store brand" of the public option would doom the private insurers to instant extinction.
I'm sure Procter & Gamble employees or Unilever employees or those of any major brand or consumer packaged goods conglomerate would rather not compete against the store brand(s) from Target or Wal-Mart or Kroger or CVS. But they do compete, and many times they succeed and thrive in spite of the store brand option being on the shelf right next to the cheaper store brand.
So what the hell are they afraid of?
And this is the talking point that needs to be hammered over the heads of the GOP, the conservative base, and the nutjobs.
The question needs to be asked of opponents of the public option: "Would you ban retailers from producing their own private-label brands to compete against big pharma and the major consumer packaged foods conglomerates?" If the answer is "no," then the follow up needs to be "Then why do you not support a public option for healthcare? The President is not for banning private health insurance. He's just putting the U.S. brand healthcare brand right next to that of Aetna and United Healthcare and saying to those brands 'I need to make sure the consumer has a more economically-priced health insurance option there on the shelf to compete with you.' There will be some who choose the public option and siphon off some market share. But others will stick with the tried-and-true of what they know, while others will switch between various brands in an effort to shop around."
In summary, why are we so cowed by an industry who feels they are uncompetitive and will fail when faced with a more aggressive competitor? Why will private insurance die when so many other corporations simply get more creative and innovative to survive on the same shelf as the store/generic brands?
PLEASE INCORPORATE THIS TALKING POINT INTO YOUR ARGUMENTS FOR THE PUBLIC OPTION!!!
Update Also note supermarkets or department stores, when introducing store brands, do not necessarily make those brands exactly the same as other name brand product. In certain cases they cretainly are doing so. If a supermarket introduces a generic "Cheerios" to compete with the name-brand Cheerios, then it is probably best to make the product as similar to the name brand as possible. However, let's take for example a store brand like "Simply Enjoy" or "Nature's Promise" as featured by supermarket Stop & Shop. "Simply Enjoy" is a brand promoting a premium taste at a lesser price while "Nature's Promise" is the store's organic brand.
And brands, to their credit, often can act more nimbly to create sub-brands. How many different flavor Cheerios do you see on the shelves? I think there are at least six flavors. The store brand Cheerios just seeks to siphon away market share from the main brand, but the store will only make such a store brand to sit next to the core brand, not the sub-brands in many cases.