Hm.

There is a difference between prohibiting rescission (insurers dumping customers for pre-existing conditions only when they get sick, AFTER they have been paying premiums for months or years) and banning the practice of denying enrollment on the basis of pre-existing conditions entirely. So the idea, previously floated, that I could "game the system" by not buying insurance until I needed it, may not be as viable as I thought.

But what is clear is that any public option - even any co-op - needs to be playing by the same rules as private insurers. But it seems to be the case that, by their very definition of their natures, that can't happen.

The ability for an insurer to deny enrollment alone, never mind coverage after enrollment, tilts the playing field in their favor. A public insurer, be it government or a co-op, is in the business of insuring people, not making a profit. Thus, all those with pre-existing conditions will invariably be forced to enroll in public insurance plans while private insurers cherry-pick healthy customers. Private insurers thus get the better end of the deal, because the costs to insure healthy people are less than the costs borne by public insurers who won't turn sick people away.

Now, on the other hand, public insurers save costs by not having pay for profits or marketing. It's hard to say, however, how this will balance out. It's like trying to weigh the amount of money you lose to file sharers who won't buy copies of your work when you release it for free distributions against the amount lost to those who won't buy it because they hate DRM, or don't even hear about it in the first place because you're too paranoid about piracy. Who will come out on top in terms of fiscal feasibility is hard to say without data - and there is none, because it hasn't been done yet.

Businesses often oppose competition by government on the basis that government has an "unfair" advantage in the marketplace. But this is a textbook case of exactly the opposite.

So, in order to truly level the playing field, either private insurers are going to have to be prohibited from denying enrollments of patients with pre-existing conditions, or we can leave it at prohibiting pre-existing rescission only. While prohibiting pre-existing rescissions is certainly called for, I somehow doubt that any public option or co-op plan will really succeed if it remains disadvantaged by a lopsided ratio of sick customers.