Pharmaceutical giant Eli Lilly & Co. (LLY) CEO John C. Lechleiter’s Wall Street Journal opinion “Health-Care Reform and the 'Innovation Test'” attacks the establishment of a government health insurance option for all Americans. The subtitle “Government-run insurance plans have curtailed access to new medicines” is not even supported in the text, unless he is implying that America is on the path to adapting the European model for cost-benefit reimbursement screening.

First I will address why a government health insurance option is imperative for healthcare reform, and then discuss each of Lechleiter’s arguments. Private insurance includes many risks beyond preexisting condition exclusions, medical underwriting and policy rescissions. Each policy contains a wide array of limits and restrictions such as the number of doctor visits per year on co-pays, maximum annual and lifetime benefits by finally divided subcategories and overall, pre-approvals, and network restrictions.

Let’s say you are one of the few that has read and understands the hundreds of pages in your health insurance policy and thought you did enough homework to fully comply. You obtain your preapproval, and your hospital and surgeon are in your insurance policy’s network. Then you’re disheartened to learn that your pre-op lab tests were sent to an out of network lab without your knowledge and the radiologist whom you never met, does not accept your plan. To make things worse, the hospital assigns an out of network anesthesiologist for your surgery, without you approval.

As you can see in this example, even with high quality health insurance you cannot stop medical providers from gaming the system at your expense. The private health insurance industry says that new regulation is needed for consumers to regain trust. I say the government option is the only way to set the standard for trust. Under a private only insurance environment, no one is totally secure.

Now let’s exaggerate our example: You are sent by ambulance to an out of network hospital. Your plan only covers 50% of the policy’s predetermined rates for medical services. Your responsibility is the other 50% of the predetermined rates plus any charges in excess of the predetermined rates. The insurer does no negotiation on your behalf. Contrast this with standard Medicare where seniors always only pay 20% of Medicare’s dictated rates. Which leaves you feeling more secure?

In general, Lechleiter claims that private companies are the engine of medical innovation and government inhibits innovation. He fails to distinguish between basic research and application, and does not acknowledge that the government through the NIH and university grants funds most basic research.