I can remember a time several years back now when some conservatives were wondering if Obamacare wasn’t actually a massive trick which would pave the way toward some form of single payer, government operated health system after the law inevitably collapsed. Crazy stuff, right? I’ve always tried to avoid the tinfoil hat crowd, and that’s some real conspiracy theory material.

Or at least it was until recently… particularly in New Jersey. Lawmakers there are watching the last insurers fleeing Obamacare and casting around for something to replace it. Hey! Here’s a thought… how about if the New Jersey State Government just goes into the health insurance business for itself? (NJ.com)

With insurance companies in New Jersey fleeing the health exchange created by the Affordable Care Act, a state lawmaker has introduced a bill to create a government-operated plan that he said will stabilize the volatile market.

The “New Jersey Public Option Health Care Act” would require the state Health and Banking and Insurance departments to develop the plans, according to the legislation Assemblyman Reed Gusciora (D-Mercer) introduced on Thursday and announced on Monday.

Any consumer could enroll in the plans, which would compete with those offered by private carriers, according to the bill (A4211). Carriers that already provide Medicaid and Medicare coverage would be eligible to join the public plans.

“Health care should be a right for every New Jersey resident,” said Gusciora (D–Mercer). “I think the climate is finally right to make significant changes to our system that will enshrine that principle in our laws.”

So the basic idea here would be for the state government to jump in and go into the business of providing a service which the private sector has struggled to keep on an even keel for ages. What could possibly go wrong? Does anyone honestly believe that the state could hire people who know what they’re doing and set up a system of premium collection, provider payments and record keeping which would be even functional, to say nothing of an improvement over what Kaiser has been doing since World War II?

Who is going to organize and mange it? Where will you get all the workers required to administer it, handle customer relations, process claims, check for fraud, chase down delinquent bills and all the other functions that a private insurance company has to handle? And I suppose we’re seriously expected to believe that a state government agency will do it with the minimum resources and personnel required to accomplish the task. Any agency created within the government grows to the maximum size possible almost immediately and eats up as many resources as it can lay its hands on. (Just read The Weed Agency for a refresher course on that.)

Obamacare is collapsing under its own weight and there are only two directions to take if it completely crashes and burns. We either go back to a fully private sector solution while trying to improve it through reforms in the regulatory process or we go to a government healthcare system. I think New Jersey is trying to tip the scales toward the latter option.