Opponents of health care reform make the argument that if we had a free market in health care, costs would go down. They claim that "government regulations" are the reason that costs rise so fast--that and employer-supplied health care subsidized by tax advantages. So, the conservative proposals would involve removing the tax subsidy and removing all regulation of health care!
We've had a "free market" in healthcare; it's resulted in costs and premiums rising at three times the rate of inflation. The public option would restore competition in healthcare--or reduce costs, as has Medicare with its low overhead (2% vs 12% for private insurers).
Yes, Medicare is more expensive per member, but that's because the elderly need much more medical care. That's why the public option would cost significantly less per member. It would insure the non-elderly and the healthy as well as the sick.
Why are conservatives so afraid of requiring insurance companies to insure everyone regardless of "pre-existing conditions" or employment status? The only people who benefit from the current system are the upper-level execs of the health insurance industry. Even CEO's of companies in other industries know that the current system costs them much too much and makes their products uncompetitive on the world markets.
As for this whole mystique of "free markets:" we don't have free markets; we have corporate dominated markets, in which all other parts of the market system are subordinated to the profits of the largest corporations. And almost all sectors are oligopolies, i.e. imperfect markets.
And corporations are NOT democratic organizations: shareholders have very little power, except in extraordinary circumstances. CEO's overpay themselves with impunity because they can control shareholder meetings through their and their colleagues' shares. Most shareholders don't even vote their proxies, except the way the board of trustees directs. And consumers can't "go elsewhere" if they feel that a corporation is unfair; they all are--and have to be if they're in competition with other corporations.
Further, health insurance companies have distributed their local markets so that there is little or no real competition. That is why payments are so high to all providers, and why big pharma has one of the highest rates of profit in the economy. Further, the escalating cost of Medicare is in large part due to the political deals that the provider industries made with Bush and the Republican Congress between 2001 and 2008.
The misinformation spread by the opponents of healthcare reform go from claiming that "the guvmint" will monitor your bank accounts and establish "death panels," to the claim that the public option will cause such hyper-inflation that the dollar will collapse.
The only problem with the public option would be if it were funded by taxes not premiums and then was under-funded because cowardly legislators didn't raise taxes enough to cover all costs. What is really needed is a comparison of current private costs and projected public costs. Obama claims that costs would be reduced on balance, and he makes a good case. In other words, the projected $1 trillion cost would probably be less than what we pay now--not to the government, but to the healthcare "system." The reason insurers will do anything they can to stymie reform, is that their over-sized profits would be downsized.
They should be. A whole industrial sector should not be predicated on the heartbreak and misfortunes of the American people. Health care should be a right, not an expensive privilege.
In an ideal world, we might have something like single-payer, but obviously, with the political uproar over a simple public option, single payer is not politically feasible. One of the arguments of the conservatives against a public option, however, is that it would crowd out private insurers; that we'd end up with single payer. If private insurance companies can't compete against it, then we will have single payer, but if private insurers can't compete against it, then they don't deserve to be in business.