For the unfamiliar reader, the title of this essay is a play on words on one of Biden's favorite words for "rubbish". SNL made a drinking game of Biden's use of the term in their spoof of the final Presidential debate last week.
Biden's proposed ObamaCare expansion should be no surprise. The House Democrats in the 111th Congress fought tooth and nail for a public option. While on the surface it is a middle ground between Comrade Bernie's backdoor nationalization Medicare for all "solution" and the status quo, it is de facto interim step to nationalization, i.e., a government monopoly. On the face it maintains a façade of a mixed public/private market, so it doesn't do away with politically popular job-based healthcare insurance, but let's be clear: this isn't fair competition. If you're a private insurer, you cannot survive long-term in a low-margin business, and neither can providers, where you are competing against a monopoly with over a $26T debt and climbing, a competitor which sets/does not negotiate prices.
A key issue is hospital costs. About two-thirds of hospitals lose money on government-program patients; overall, Medicare/Medicaid payments cover only about 87 percent of patient costs, while private insurance plans pay up to 145%, making up the difference. With many (especially rural) hospitals being pressed by dwindling private sector patients, any shift of patients to below-cost government reimbursements could lead to significant hospital closures; a smaller supply of hospitals has obvious implications on competitive pricing and exacerbate the unsustainable price spirals in the private sector. It's increasingly difficult to find doctors willing to take on government program patients with excessive paperwork, regulations and lower, delayed reimbursements. Biden's plan would also reportedly allow lower-income workers to opt into a likely lower-cost public option premium, co-pays, deductibles, etc. (unlike ObamaCare, which may not provide subsidies to employees with healthcare insurance options at work). Obviously a lower number of insured policyholders undermines the insurer's scale in negotiating with providers. In the long run, employers may simply decide to capitulate to exploding benefit costs and point employees towards the public option plan.
That is why Biden's public option "reform" is a slippery slope to nationalization with its inevitable rationing, lower quality and availability tradeoffs, less innovation, and an indifferent, rigid, unresponsive centralized bureaucracy.
