Public vs. Private Insurance

I found this tidbit quite some time ago - apologies for not posting it sooner.

"Public and private insurance have distinct strengths and distinct weaknesses. Private insurance is generally more dynamic and flexible than public insurance, but at the same time less stable and more administratively complex and costly. Public insurance is better at spreading risks broadly—given the extreme concentration of medical costs, private plans inevitably have incentives to “cherry-pick” healthier patients—but this advantage carries with it the potential cost of a lesser capacity to adapt rapidly to changing technology or the distinctive personal circumstances of individuals. Thus, a public-private hybrid can provide an important check on both the public and private sectors, ensuring flexibility and stability, market accountability and democratic accountability, inclusive social protection and private innovation—in short, a broadened range of good, meaningful choices."

This comes by way of Jacob S. Hacker, Professor of Political Science at U.C. Berkeley (a title he holds among many others). The rest of his paper is excellent; a must read if you are in favor of (or simply curious about) the benefits that a Public Plan will afford.