Under the weather: hurricanes and public option.

• Author: Suderman, Peter
• Position: Citings - Brief article

When Congress debated whether to create a new government-run health insurance option, critics argued that the program would be fiscally unsound and that it would push private insurers out of the market. An experiment with government-run property insurance suggests that both fears may be warranted.

In hurricane-prone Florida, some residents found it difficult to purchase homeowners' insurance after Hurricane Andrew in 1992. Because of rate regulations, insurers were hesitant to offer them policies, so the state began to sell coverage as well. Despite plans to keep the public option's rates higher than those charged by private insurers, thus making the state the insurer of last resort, political pressure resulted in subsidized rates that made the public plan competitive with its...