“Centrist” Democrats opposing a government-run public health insurance plan have seemingly forgotten the first rule of crafting public policy – namely, that the policy should be popular with the public.

First, some background: because both the Obama White House and Democratic leaders deemed a single-payer system too politically risky and difficult to implement, they settled on a mandatory insurance plan that would provide government subsidies to Americans who couldn’t afford to buy health insurance on the private market.  The insurance companies generally favored this scheme because it would guarantee them tens of millions of new customers who had previously been priced out of the market.

Even though mandatory health insurance is essentially a way to pay off private insurers in order to attain universal health care coverage, most legislators don’t simply want to hand them a blank check.  This is why progressives have insisted on a public option to compete with health insurance corporations.

After all, one reason why mandatory insurance systems in France and Germany have worked so well is because the private insurers that provide basic coverage aren’t allowed to make a profit.  Generally speaking, non-profit insurers do a better job of providing basic coverage than for-profit insurers because the for-profit firms have a financial incentive to deny patients’ claims. 

As T.R. Reid explains in his book “The Healing of America,” for-profit health insurers are actually punished by investors if they spend too much money covering their patients’ care.  Additionally, the competitive nature of the for-profit insurance market means that insurers have to spend more money on administrative costs and marketing than do non-profit companies.  Paul Clay Sorum, a professor of internal medicine and pediatrics at Albany Medical College, notes in an essay on the French health care system that French non-profit insurers have an average administrative overhead of around 5%, versus an average administrative overhead of almost 12% for private U.S. insurers.

Now, let’s bring this discussion back to the present and imagine that a health reform bill with no public option passes.  In fact, let’s imagine how it will impact a fictional 20-something voter named Jimmy.  Being the young and idealistic sort, Jimmy happily supported Barack Obama in the 2008 elections, mostly because he thought the candidate would help his family get health insurance that he currently lacked as the head of a small start-up company.

Let’s say that Jimmy and his wife have two children and a combined income of $60,000.  Under the Senate Finance Committee proposal, the family would receive a government subsidy of $821 and would be on the hook for $6,363 for the rest of the premium.  In other words, the government would be mandating that the family pay more than 10% of their income to Cigna, Humana or whatever other insurance giant happens to be the predominant provider in their area.

You can see where this is going, can’t you?  Jimmy and his family, who started out as loyal Democratic voters, are now so angry that they’ve started wearing powdered wigs and tri-cornered hats and attending local “Tea Party” rallies, all because some centrist Democrats didn’t think they should have the choice of a lower-cost public health insurance option.

To be fair, not all reform plans on the table would place such a huge onus on Jimmy and his family.  The Senate HELP Committee bill, for instance, would pay far more generous subsidies and would cap the family’s health insurance payments at 6.6% of their income.  But even if the government were to foot the bill for 100% of the family’s premium, is it responsible for the government to subsidize a system that maintains the insurance industry’s most wasteful and inefficient practices?

All of this is what makes the controversy surrounding the public option so baffling, as it is a rare instance where good politics and good policy intersect.  If Democrats hold firm on the public option, they will happily find that Americans will be grateful for an efficient and affordable alternative to the for-profit health insurance companies.

This article was produced as part of Commonweal Institute's Progressive Op-Ed Program