Economics: What will the health care reform plan look like?

There are the occasional stories about what the program might look like.

There is the "pay or play" of mandating businesses to offer health plans or pay into a government fund.

What might that government fund do?

Perhaps provide tax credits for people to buy their own insurance.

Perhaps fund a government insurance program like Medicare except it would be for those pre-retirement age.

Would taxing businesses be enough?

Another idea going around is taxing the health benefits of individuals that are currently offered pre-tax through employment. I'm told that the reason for the linkage of insurance benefits as part of employment compensation was a "historical accident" when companies wanted to bypass wage controls.

It could be a combination of all of this.

If you are a free-marketeer seeing this tidal wave coming which plan would you support?

In the end, the government sponsored bankruptcy of Chrysler and the majority control of shares in the GM bankruptcy might be small potatoes compared to a massive increase in government control of the health care system. And unlike GM, where it is likely the Government would get out (sooner or later), it would be unlikely that the Government would get out of the health care business.

P.S. It should be noted that the Federal government already has considerable control over the health care systems of the USA: Medicare (for retirees is funded by the Feds), Medicaid (welfare health program funded by Feds and States), VA (funded and run by the Feds), Military (the various uniformed services run health systems) and IHS (Indian health service is run and funded by the Feds).

P.S.S. In the UK, they have the national health service where the government hires the medical professionals and pays for the services through taxes. In Canada, they have "single payer" where the government is the national insurance company and it is funded by taxes. In the USA, we have these two approaches for some parts of health care delivery plus a private insurance system.

UPDATE: According to this item the government already account for 47% of health care spending. Excerpt:

Sadly, we are already well on our way to a wholly government-run health insurance system. After fall, about 47 percent of all health care expenses today are paid for by federal, state, and local governments, e.g., Medicare, Medicaid, and State Children's Health Insurance Program (SCHIP). Establishing a public insurance scheme would dramatically increase the percentage of health care that is paid for by the federal government.

What would be the consequences of a parallel government insurance and private insurance?

The Lewin Group crunched the numbers through their health care model and found that premiums for the public option plan would be 30 to 40 percent lower than private plans. Sounds great, right? But these lower premiums are essentially achieved by imposing price controls. The Lewin Group assumed that the public option plan will pay doctors and hospitals at the same rates they currently receive from Medicare. And Medicare reimbursements already run 71 percent and 81 percent below what private health plans pay hospitals and doctors, respectively.

First, the somewhat good news. Lower public option premiums and an increase in Medicaid coverage would attract 28 million of the 48 million Americans who currently are not covered by health insurance. Now the bad news. The lower premiums would encourage employers to drop private health insurance and put their employees into the public plan. Overall, the Lewin Group estimates that if Medicare reimbursement rates are imposed, the number of Americans with private health insurance would decline by almost 120 million, leaving only 50 million Americans in the private insurance market.
.........
The best result of creating a parallel public insurance scheme is that the United States would end up with an explicit two-tier medical system in which privately insured Americans have better access to better medical care. Such two-tier health care systems already exist in countries with national health care schemes such as the United Kingdom and Germany. In the United Kingdom, more and more Britons are opting for private health insurance instead of remaining with that country's National Health Service. Privately insured Americans would get higher quality health care, but because the market for medical innovation would be smaller, everybody will get worse care than they would otherwise have received had most health care not been nationalized.