Gas Stations

You live in a town with only one gas station, which sits on one corner of a crossroad. As this is the only gas station in the town, you are at the mercy of whatever the owner charges for gas.

Soon, a second gas station is put up on the corner opposite. The first gas station owner now has competition and must be more careful with raising rates and being competitive with amenities and other considerations, or you will start getting gas from the other gas station. However, there is still some chance for collusion between the two, as they are the only game in town and might find ways between themselves to increase their profits at the expense of the people who live there.

The town continues to grow and soon a third gas station is built on the third corner of the crossroad. Now, both existing gas station owners have competition from another gas station. The opportunities for collusion go down with more diverse ownership, and the competition for customers goes up. The people of the town have a lot more choice and can pick which gas station to use depending on their immediate or long-term needs.

Finally, the government steps in and builds its own gas station. It is a no-frills gas station, without bathrooms or any food/beverages, there are no full-serve lanes, and there is not a mechanic on duty. However, it can charge really cheap rates for gas. Initially, the other three owners cry foul because many of the town's people use the cheaper gas as an excuse to go to the new gas station. However, after the initial thrill of the cost, they soon realize they like having full-serve, even though they pay more. They like having a mechanic to look things over and fix their cars when something isn't right. They like getting food and beverages for the long trip ahead. Soon, many realize that it is worth the higher cost of gas at the other stations in order to get the service and amenities they want. However, those who simply cannot afford those other services continue to use the cheapest government-run gas station for what they need most-- gas to run their car.

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Now, replace "gas" with "insurance" and "gas station" with "insurance company/ies" and you have the health care debate explained in simple terms.

A public option will NOT raise rates or cause insurance companies to go out of business. It provides more competition and an additional, no-frills option for those who cannot afford more or better coverage. If you like your current insurance company and results, don't change. But if you think you need more, or less, coverage, you will have yet another option to choose from. Hopefully, insurance companies will then also create their own option in a similar coverage amount and cost to the public option, giving them access to more clients and more income -- which will further lower rates for all, as they have more clients and money coming in.

And, more importantly, if an insurance company drops your coverage (which is supposed to become illegal, but we'll see if the reality holds true to the desired goal), you have an option that cannot deny you coverage. For those with pre-existing conditions are very expensive treatments, this is a godsend.