"Penn State and Ohio State did not drive Harvard out of business"

That is the argument made by Jeffey Toobin on Bill Maher's Real Time back on September 18th.

He made this point to demonstrate that the public option is really just an "option", and that public and private can co-exist without the public sector entity driving the private sector entity out of business. On the surface, this is a fairly convincing argument.

But the problem with that argument is as follows:

All of the plans being considered require insurance companies to accept customers with pre-existing conditions. The problem with that is, why would a person buy health insurance before getting sick if they could not be denied coverage once they did get sick?

To solve that problem, the President has proposed a mandate that everyone must purchase coverage. If you don't have insurance, then you will be fined. But that leads to the following question: who will decide whether or not a plan fulfills all of the requirements of the mandate?

Ultimately, those requirements will be outlined by the health care bill and enforced by some agency of the government.

We should be asking questions like, if I wanted to buy a high deductible plan (such as a $10,000 deductible) to cover only unexpected medical expenses, will that kind of plan qualify, or will it be considered a "non-qualified" plan? Will only benefit rich, low-deductible plans be considered "qualified"? And if a plan is deemed to be "non-qualified", won't that effectively force those plans off of the market? And if the Federal government has the power to force certain plans off the market, how is that not a takeover of the industry?

In summary, once they require insurance companies to accept patients with pre-existing conditions, then they must require everyone to buy insurance. Once they can mandate that everyone buy insurance, they will have to decide what kind of insurance is considered a "qualified insurance plan". Once they have that power, then they have effectively taken over the entire industry. So no, it's not "just an option".