Most adults would agree that the world is not perfect. However, there is a theme in this thread that continues to ignore the potential for insuring more Americans. The proposals include tort reform, no underwriting, no pre-existing conditions, and no claim denials (except for fraud). If all of those proposals are implemented, we should see a reduction in the premiums we all pay, and that should help out those who don't currently have coverage by making it more affordable. The insurance carriers are willingly going along with removing these restrictions because they know they can drop rates and attract those who could not afford coverage before. They also know they can provide information to potential members to help them improve their health, and thereby continue to reduce the number of claims presented.
The last I heard the 'public option' would not be available to anyone who was currently covered. Yet to be determined is what the benefit design of the public option would be, and how it would compare to the other plans available. The House bill on the public option authorized $2 trillion in start the plan. But there is no infrastructure established to administer the plan and the $2Tr will probably all go into setting up infrastructure. IMO, the public plan is designed to be a stop gap, not to provide 'competition.' It will take a lot more than $2Tr to cover the 45M Americans who don't have access to health insurance now, and who would demonstrate diminished financial capacity to pay premiums -- the 'entry fee' for the public option.
In fact when you look at the content of the two paragraphs above, what we have is a marginalized population.
So as Martha has said, all of this would lead to adverse selection. But I suspect that the adverse selection would be moderated by the lifting of restrictions such that there wouldn't be a large increase in claims. Of course, if we changed how we pay providers, that would help too (I'm not giving up on this one, friends).
-- Rita