Conservatives and insurance companies are scared that a public plan will crowd out private insurance plans and lead to single payer. 3 examples on why that's not going to happen.
After the jump.
Insurance companies and conservatives claim that a public plan with government resources will out compete and doom private industry. Apart from examples in other countries, there's at least three examples of public and private sectors working great side by side.
Libraries. Think about them for a second. This is a government funded place, with free membership where anyone can borrow books for free!. Not just books, CDs, DVDs, even newspapers. Just borrow them and give them back.
This has, of course, completely wiped out the book store business in the US. Since you can read the daily paper for free in the library, why would you ever buy a newspaper. If you can read a book for free or rent a dvd for free, why would you buy it? and libraries are free, they don't have to be self sufficient. If libraries were only just being proposed today, publishers, bookstores and the RIAA would howl about how it would hurt their business, .. and people would believe them, after all any economist will tell you that if you can get something for free, you'll never pay money for it.
Schools, We have a huge system of public schools. They aren't self sufficient either, in fact education is a major expense in many states. School attendance is compulsory. It's an educational mandate.
Surely no private school would be able to survive in that kind of a hostile climate. How can you compete with a massive state funded system? You can ask the many private/religious grade schools, high schools, and private universities that include Stanford, Yale, Harvard and others.
Post Office. The government owns and runs the Post Office. Everyone in it is a government official. They deliver the mail 6 days a week (though I would be fine with just 5), They charge about .50 for a letter. Surely they could undercut any private service, and drive them right out of business. Except Fed Ex, DHL and UPS seem to be just fine.
so when it comes to health insurance, is the claim that it will drive private insurance out of business a valid one or simply a boogeyman made to frighten people