Monopoly Healthcare

Republicans pretty much oppose all Democratic proposals to reform healthcare.  So naturally they oppose the creation of a public option as part of healthcare reform too. No mystery there.  But why do so many Democrats oppose it?  Paul Krugman speculates:

I may have a new hypothesis about the political economy of the health care fight. One thing that’s obvious, if you look at the balking Democrats I chided in today’s column, is that almost all of them come from states with small population. These are also, by and large, states in which one or at most two private insurers dominate the market.

So here’s a suggestion: while the opponents of a private plan say that they’re trying to defend market competition, what they’re actually doing is defending lucrative local monopolies.

There’s probably something to this.  It doesn’t even have to be especially sinister: politicians routinely pay outsize attention to companies with a big presence in their state even if they aren’t outsize campaign contributors.  Though the latter certainly doesn’t hurt.

Anyway — interesting theory.

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