Just Like Healthcare Needs A Public Option, So Does Banking

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Above Photo:  Andrew Harrer/Bloomberg

Note: We do not favor a public option in healthcare even though we support public banking as an option to commercial banks. The healthcare public option will just another layer of bureaucracy to healthcare. We do not need more insurance options, we need one option — improved Medicare for all or single payer. Public options tried at the state level did not solve the healthcare crisis. The public insurance ended up attracting the sickest patients who needed the most healthcare coverage. They quickly became overburdened while the insurance industry kept the healthier people who needed less healthcare. In addition, when the public option was debated in Congress, the insurance industry argued that it would have to be on a “level playing field” with the insurance industry. That meant not providing the kind of subsidy that Medicare currently receives. That would force the public insurance to cut coverage. Health care should be a human right that is available to all on an equal basis funded by through taxes and not a for-profit industry that prevents people from receiving necessary health care because they cannot afford it.

The recent kerfuffle over private health insurance companies refusing to accommodate those with plans acquired through the Affordable Care Act exchanges has exposed a glaring issue — why don’t we have a public option to compete with private health insurance profiteers?

The same could be said for banking, as well.

When health insurance giant Aetna pulled out of the Affordable Care Act (ACA) exchanges, ACA opponents calling for its repeal celebrated the measure as proof that President Barack Obama’s signature health care legislation was too cumbersome and too expensive for insurers to accommodate. However, it was revealed last week that Aetna threatened to pull out of the exchanges if the federal government refused its merger with Humana, another private health insurance conglomerate:

“It is very likely that we would need to leave the public exchange business entirely and plan for additional business efficiencies should our deal ultimately be blocked.”

-Aetna CEO Mark Bertolini to the Department of Justice, July 5

Regardless of whether or not the merger was approved, it would have been a lose-lose situation for Americans either way. Because the ACA requires everyone to purchase private health insurance, insurance companies are free to charge as much as they wish for plans that offer only the mot basic coverage. Even without the merger, there are many states where residents only have one insurance provider to choose from, or only a small handful of options for an insurance plan. And had the merger been approved, Aetna/Humana would have controlled an even larger market share, allowing them to extort customers even more. As USA Today reported, insurance companies’ primary concern isn’t providing healthcare, but their own bottom line.

“Serving the public is not part of their mission. … They’re crunching the numbers and looking at tightening profit margins,” Georgetown senior research fellow Sabrina Corlette told USA Today.

This has many Americans clamoring for a public health insurance option, which would force private insurers to compete by lowering premiums and deductibles, and offering a wider array of coverage and more diverse plans to customers. In a truly free market, a public option for any product or service will naturally result in higher quality goods and services and lower prices, which is a tremendous benefit for consumers.

So why not do this with banking?

Currently, with the exception of North Dakota, every state, county, and city is forced to store its tax dollars in private Wall Street banks. And as Forbes reported in April, the cartel of privately run central banks that control national currencies are putting their nations’ money into the stock market. In the event of a financial crisis in the vein of 1929 or 2008, this means money used for public infrastructure, pensions, and other necessary public services are at risk of disappearing completely. And you don’t need an MBA to know that the stock market is a risky bet, no matter how high the stock price.

Alternatively, if, for example, each of the fifty states chartered its own public bank to store public tax dollars and make low-interest loans for the sake of creating jobs, updating critical infrastructure like roads, bridges, railways, and airports, and refinancing student loan debt to make sure the next generation of leaders isn’t shackled with decades of debt, the American economy would be far stronger as a result. States would save hundreds of millions, and even billions of dollars, by not having to pay usurious interest rates to private banks.

In addition to state-run banks, the next president could appoint a Federal Reserve chair whose sole job will be to nationalize all twelve branches of the Federal Reserve, and put power of currency back in the hands of the public. The Fed could then be utilized for a Quantitative Easing initiative to buy back student debt and abolish it, as presidential candidate Jill Stein has proposed. By suddenly freeing up students from their debt burden, an entire generation of young people will have disposable income to circulate throughout their local economies, creating millions of new jobs as a result. All of this can be done through public banking.

The coming months are a critical time for Americans to critically observe how private entities act with no public competitor, and in the upcoming elections at the local, state, and federal level, the American people have an immense amount of power to demand real solutions from their representatives in government. It’s up to us to hold them up to the standard we want.