Here is part 16 of a 20(!) part series analyzing and debating the President’s comments on health care reform at a Portsmouth, New Hampshire town hall:

THE PRESIDENT: Now, I recognize, though, you make a legitimate — you raise a legitimate concern. People say, well, how can a private company compete against the government? And my answer is that if the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining — meaning taxpayers aren’t subsidizing it, but it has to run on charging premiums and providing good services and a good network of doctors, just like any other private insurer would do — then I think private insurers should be able to compete. They do it all the time.

Follow-up question: Mr. President, are you confident that current and future policymakers won’t try to give the public option advantages over private plans? Look at all the cases where that has happened:

  • Fannie Mae and Freddie Mac crowded out private firms in the mortgage securitization business because they had government-provided advantages.
  • Only the government offers flood insurance, because private firms cannot compete.
  • Only the government offers terrorism reinsurance above a certain amount, because private firms cannot compete.
  • The Tennessee Valley Authority has no competitors, because the government has granted TVA market protections and advantages.
  • You are proposing cutting Medicare payments to private plans that compete with the Medicare “public option.”
  • Congressional Democrats argue that the government should save money by directly negotiating drug prices with pharmaceutical companies, a negotiation in which the government has most of the power.
  • The Federal Housing Authority is crowding out private forms that offer mortgage insurance.
  • The government is about to start crowding out private lenders who offer guaranteed student loans, in favor of direct student loans offered by the government.

Other posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill
  8. The bills would take Medicare savings needed for solvency and spend them on a new entitlement
  9. Medicare is not a good example of government-run health care because Medicare is fiscally unsustainable
  10. Even if the public option drops out of legislation, other parts of these bills would put private insurance under government control
  11. The President says the public option will keep private insurers honest at the same time he proposes cutting payments to private insurers competing with the Medicare public option
  12. The pending bills would move more cost-benefit decisions from insurers to people chosen by the government
  13. Guaranteed renewal and guaranteed issue
  14. The President says “we may be able to get even more than” the $80 B of budgetary savings that the pharmaceutical industry thought was a ceiling promised by the White House.
  15. The President says he’s not “promoting” a single-payer plan, but the only concern he raises is a disruptive transition.