If an extended Medicare plan or other public option were equivalent to private plans, we would start by assuming equal costs. Then we would argue over the efficiency vs inefficiency of public or private. But costs are mixed with coverage questions. Private plans, like private schools, can exclude the clients they don't want. So an excess of expensive clients might make the public plan disproportionately high-cost to the provider.

But this may be offset by the lack of need for profit. In any case, some money is being spent on the uninsured now, and other money is spent on private plans now. We are only arguing over who is contributing how much, as always. Even now, taxpayers spend billions helping hospitals pay for ER visits by the uninsured.

Plenty of wiggle room, I'd think, in the difference between cost-to-patient (or taxpayer) and cost to the system. The latter is on average much higher here than in single-payer countries, last I heard. The system cost does go up in some areas over time, but many of those costs will decrease as procedures become familiar or automated. One can buy an MRI for $400 now. As that machine's price gets further amortized and more competition grows in the form of more commercial labs and clinics, that price will go down.

Costs that will go up include new intervention techniques and new expectations for intervention. Bringing the difficult cases into the system should be net neutral, though, since they are often costing the system now through emergency ER. The only way to save that money for thew whole system is to let them die early and often.

Assuming we don't want that, perhaps a risky assumption, the only reason a private plan can out-compete the public one in either client cost or system cost is to exclude the expensive patients. In other words, your private plan is profitable to the extent it avoids covering illness. Nice business model. Profit through shirking real costs, and dumping them on the public. Sounds rather like industry's approach to pollution.