State employee health plans are really private health plans under contract with state government, and the simple fact that they are self-insured (like many private plans) does not make them public entities.

State Employee Health Care as a “Public Plan”, by Robert E. Moffit, Ph.D.

How the United States government will intervene in the delivery of health care services is uncertain, but it is becoming increasingly clear that it will in some fashion.   It is also rather clear that the proponents of the new program have failed to provide any meaningful details about how government intervention will meet the lofty goals of the reformers.

A recent analysis of the “public plan” concept from the perspective of the current state and federal ventures into publicly financed health care illustrates what I have been saying for quite some time.  The fiscal intermediaries of Medicare and Medicaid are none other that the BUCA crowd (Blues, UHC, Cigna, Aetna).   

President Obama has proposed that Congress create a new public health plan to compete with private health plans in a national health insurance exchange.
The President says that Congress can create a “level playing field” nationwide to ensure a fair competition between the newly created public plan and private health plans and that Americans who like the private health insurance coverage that they have today will be able to keep it and pay less. This claim is simply not credible.

As the author points out, the current public plans are simply contracted out to the BUCA’s.   How has this worked out for us?  Not well.

Moreover, state experience is hardly a prescription for fiscal sanity at the national level, where current and future taxpayers must somehow cope with the recent explosions in federal spending and debt, as well as the trillions of dollars in promised entitlement benefits that are not funded.

If Congress creates a public plan, it is likely to be too big to fail, as is the case with so many other enterprises, thereby guaranteeing even greater burdens on taxpayers who are already faced with the seemingly insurmountable debt imposed by Social Security, Medicare, and Medicaid.

The “public plan” solution as presently conceived is not a solution and oddly, not really a public plan.  It is a supremely ironic division of the spoils among the managed care oligopoly that most Americans would identify as the source of the problem in the present system.