A public option opt-out would set a dangerous precedent

Another consideration concerns what it means to opt out. On the insurance side, opting out presumably means that people within the state who cannot afford health insurance would not have a public option to choose from and would be limited to the private insurance companies that operate within their jurisdiction. But what about the tax revenue that would have gone to subsidize uninsured residents of that state through a public option? Will that money in exiting states go to private insurance companies?

One problem that has cropped up in policy areas where states have differential policies is how it affects migration patterns. Will unhealthy people migrate to states with a public option if their own jurisdiction opts out of the national system? States may be tempted to establish residency requirements for health care the way they did for welfare. This may make it more difficult for the uninsured to get coverage in those areas.

From a governance standpoint, the public option creates a worrisome precedent for other policy areas. If states don’t like congressional decisions on gun control, climate change or immigration, will state legislators demand an opt-out? If this were 1965 and there were a Medicare opt-out, it is conceivable we would have ended up with two-thirds of the country having Medicare, while one-third did not.

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