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Supreme Court Decision on Health Care Could Hasten Single-Payer System

However, the ACA does not solve the broader affordability problem for businesses and middle-class families facing rising premiums, co-pays and burdensome claims processes.

The law provides subsidies for low- and moderate-income individuals to purchase health care and assistance to small businesses. Together with the individual mandate, this should lower the number of Americans without insurance from 50 million to about 30 to 35 million.

These subsidies will accelerate health care inflation, driving up the cost of drugs, doctors' visits, hospital stays and administrative costs. Meanwhile, malpractice suits will rise faster than ever, making health insurance increasingly unaffordable for businesses and middle-income individuals.

The ACA requires the Office of Personnel Management to sponsor, through private firms, two health plans. Those public options will be advantaged by larger taxpayer contributions and exemptions from critical regulations imposed on private insurers.

Businesses will have a strong incentive to push employees into one of the two public plans or drop coverage altogether and pay the $2,000 penalty imposed by the ACA. Middle- and upper-income employees displaced from employer-based plans will likely find one of the "public options" the least expensive and most sensible choice.

Once one major firm in a market -- be it a national market like autos or local market like dry cleaners -- drops private insurance in favor of a government plan, or drops health coverage altogether and simply pays the $2,000 per employee fine, others will be compelled by price competition to follow.

All along, the OPM-sponsored plans were a Trojan horse. They will be advantaged over private insurers even with the individual mandate helping pull down the latter's costs per enrollee. With the ACA pushing health care costs ever higher, the artificial price advantage of government-sponsored insurance will be too big to resist.

Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and a widely published columnist.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Professor Peter Morici, of the Robert H. Smith School of Business at the University of Maryland, is a recognized expert on economic policy and international economics. Prior to joining the university, he served as director of the Office of Economics at the U.S. International Trade Commission. He is the author of 18 books and monographs and has published widely in leading public policy and business journals, including the Harvard Business Review and Foreign Policy. Morici has lectured and offered executive programs at more than 100 institutions, including Columbia University, the Harvard Business School and Oxford University. His views are frequently featured on CNN, CBS, BBC, FOX, ABC, CNBC, NPR, NPB and national broadcast networks around the world.
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