I was wrong, creating a publicly sponsored health insurance option for all Americans would be extremely dangerous. As this Health Affairs policy brief argues:
There's also worry that people with private insurance would transfer into a more attractive publicly funded health plan — a phenomenon known as “crowd-out.” As private plans then disappeared, that could lead to what opponents fear most: a “single payer” health care system in which government pays all the bills for health care.
A prospect so horrific they have to repeat it:
Finally, opponents are concerned that the increasing bargaining powers of a large government plan could destabilize the marketplace, controlling prices and choking competition. Economists call the phenomenon a “public monopsony.” As private plans were driven out of business, government could become the predominant payer. And if pressures mounted to subsidize public coverage, in effect the government might come to finance all health insurance — leading to what in effect would be a single-payer system.
Oh yeah: "Opposition to the notion of a public plan comes from health insurers’ leading trade association, America’s Health Insurance Plans (AHIP), as well as from some conservative Democrats and many Republicans." What it does not come from is the large majority of the American people. But who do you think Joe Lieberman and Max Baucus are listening to?
Update: You might be interested in seeing where Holy Joe gets his dough.