News stories continue to suggest that Senator Barack Obama’s health care plan would build on today’s employer-based system of private insurance. In a new National Review Online article, I argue that Obama’s plan would actually lead to the demise of private health insurance, including coverage provided by employers.
The reason is simple: the public insurance option Obama calls for in his plan would use price controls to keep premiums low, which would completely undercut the ability of private plans to compete and gain market share. Estimates from the Lewin Group confirm that the vast majority of new insurance enrollment for a plan like Obama’s would go with the public insurance option because of the premium differential associated with such price controls.
Details in the NRO article.