Public Option is the Cap and Trade of Health Care and We Need them Both


Image credit: leoncillo sabino/Flickr

With the climate debate shifted over to the Senate for the time being, the House of Representatives has occupied itself with developing a health care reform plan. Recently, a consensus on this plan has slowly begun to emerge. It calls for the establishment of a public option but allows states to opt-out if they choose.

Like all things that pass through the legislature, lots of people think this is a great idea while a sizable minority think it's evil. It reminds me of a similar mechanism that was recently the subject of hot debate: cap and trade.

Cap and What?

The cap and trade idea has been kicking around for a while and even though some people still don't get it, there have been enough good explanations that it doesn't need repeating.

For the sake of discussion, however, a few key points are worth refreshing. Specifically important is the idea that a cap and trade plan, like the one included in the draft Senate Climate Bill, creates a new carbon economy. This economy encourages companies to reduce emissions by giving them a financial incentive to do so.

The other important thing to remember is why some people don't like the idea. Opponents fear that a cap and trade might raise the cost of energy (which it could, at least initially) and worry about who will oversee the system.

And the Public Option?

The best part about both cap and trade and public option is that their names literally describe the underlying concepts. Essentially, the public option would create a government-backed insurance opportunity that would compete with whatever for-profit plans exist in your area. It's a simple idea and no one explains it better than Robert Reich:

By creating a public option, the government would force insurance companies and the medical infrastructure to reduce costs to patients because there would be a financial imperative to do so.

We Need them Both

Governments have lots of ways to influence changes in industry. Regulation is one, but there are always loopholes. Taxation is another, but this creates an economic penalty that can ripple through the economy. The best option is to foster competition and let businesses do what they do best: innovate and capitalize.

Instead of penalizing companies, public option and cap and trade plans generate new opportunities. They create inclusive solutions that are viable because they actually encourage growth.

The United States needs a cap and trade plan because it will help reduce greenhouse gas emissions and spark new industries and innovations. A public option is just as important because it will lower health care costs for all Americans and force a broken system to begin mending itself.

Both plans create economies that favor good work and encourage honest treatment of customers and the environment. We know that there is an inextricable link between our health and the environment, it's time we began managing them responsibly, together.

Read more about cap and trade:
Cap and Trade Explained in Under Four Minutes (Video)
Sarah Palin Slams Cap and Trade in Op-Ed, Completely Misses the Point
Obama's Cap and Trade Would Generate $645 Billion in "Climate Revenue"
The Father of Cap-and-Trade Calls For... A Tax on Emissions

Tags: Carbon Taxes | Congress | Health Care

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