Congressional leaders and the Obama administration want to include in their sweeping health-care legislation a new government ?competitor? to private health insurance for nonpoor, nonelderly adults. Advocates say it would be just a ?public option? and that private insurers shouldn?t be afraid to compete with it. NCPA President John Goodman debunks both notions in a new Health Care News article. Here?s one of his main points:

For competition to work, both competitors must be on a level playing
field. In thinking about what this might look like, some people point
to the current arrangement under which private Medicare Advantage plans
offer seniors an alternative to participation in conventional Medicare.
The trouble with this analogy is the playing field is in no sense level.

As
an entitlement program, conventional Medicare has a blank check drawn
on the U.S. Treasury. No matter how sick a senior gets, no matter how
many resources are used in treatment, no matter how high the costs
mount, Medicare can always count on the Treasury to pay the bills. No
such blank check is available to private plans.

On a level
playing field, every player has the same chance to succeed or fail.
This means the (risk-adjusted) premium to be paid on behalf of every
potential enrollee is fixed in advance. The only way a plan can get
income is by attracting the enrollees along with their premium payments.

But
if every plan?s revenues are determined only by their success in
attracting enrollees, every plan can potentially fail. If public plans
can fail just as private plans can, they are ?public? in name only and
in reality indistinguishable from private plans.

There?s more good stuff. Go read it.