Happy Canada Day, and the public option

A happy Canada Day to all of you, particularly the Canadian with whom I'm privileged to share my joys and sorrows every day.

I suppose Canada Day is a good day to talk about health care. The debate about the merits and demerits of the public option, to me, leaves out something important. I'm a little fuzzy about how the public plan is supposed to generate competition and put pressure on private insurers to cut costs. If that's going to work, then why are we in the position we're in? Private insurers are already competing for business, aren't they? If competition isn't working now for some reason, why would it work when you introduce a public option? It seems like whatever mechanism is preventing market forces from working the way they do in other markets will still be working with the public option in place.

By the way, "All the private insurers are just EEEEEVIL people who would deny their grandmother care to save 50 cents" is not an answer to this question. Presumably, if the market worked properly, people would shun health insurance companies that unfairly denied them coverage in favor of ones that paid promptly when they were supposed to. The fact that this doesn't seem to happen suggests that we need to make the individual health insurance market more competitive and give consumers data they need to make good choices, not that we need to hand over the keys to big government. We'll see what form the Health Insurance Exchange ends up taking; that may do more to help than the public plan.

While I disagree with pretty much everything he says about the subject, Ezra Klein at the WaPo is a good source of information on these issues. I particularly recommend this post from today.

Update: Maybe George Newman's op-ed today will spark some more discussion around these issues. I couldn't agree with it more.