A Public Option is not Socialist

If a “public option” is socialist, I guess I’m a socialist. I don’t think it is, though. I think it’s insurance. 

The core principles of insurance are inherently collective. The scheme of insurance only works if there are enough people participating in it to spread losses across all participants. There *must* be people paying into it who don’t draw from it–or who draw less than others–at any given time, otherwise it’s not insurance, it’s a payment plan.

Insurance isn’t a payment plan because it is designed to insure you against losses that you otherwise can’t hope to pay for–or that would make the risk of the ensured endeavor too high to engage in. 

The higher the risk of loss, the higher your premiums are. If your risk is so high that your premiums outweigh the potential gain of your endeavor, then you must choose between accepting the uninsured risk or not engaging in the endeavor. 

Health insurance is different than liability or property insurance, however, in the sense that you can’t choose–in any meaningful way– not to engage in the endeavor to keep living. 

Because there is no way not to engage in the health risks of being alive, we must decide collectively whether health care is a right or an option. 

I think it should be a right. No one’s health or life should depend on their ability to pay–especially since there is enough surplus wealth in the US to easily afford health care for everyone. 

If health care is a right and we insist on using an insurance scheme to pay for it, then a public “option” is actually a necessity. Either that or a forced cap on insurance premiums and a requirement that insurance companies extend policies to everyone.

The public option solves the problem of health care as a right by ensuring that there’s at least one reasonably priced option available. 

But, it doesn’t solve the participation problem–healthy people eschewing insurance and accepting the risk of going uninsured. 

Insurance is inherently collective. Adding the government as an insurer doesn’t make it socialist. If that were true, then the Federal Deposit Insurance Corporation would be socialism. If the FDIC is socialist, then the financial industry is *literally* founded upon and backed by socialism.

Adding a public option to health insurance markets is no more socialist than the FDIC. It’s just sound economic and social policy–assuming, of course, that we want to pay for health care with an insurance scheme. That’s not at all clear, but definitely a topic of a different discussion.