Thursday, April 09, 2009

Universal Health Care - Public Option: The Choice of a New Generation

by Tim Foley

It’s become clear that this spring recess, a lull in the Congressional session when members spend an extended period of time in their home districts, is time for those for and against reform to stock up on their facts, figures and arguments and prepare for the next round of debate. The public option – having the choice of enrolling in a public plan similar to Medicare rather than private insurance – is already one of the main flash-points in the Congressional debate, and we’ve already seen somewhat conservative analysis from the Lewin Group and a full-throated progressive defense of the concept in a new report from economist and health policy wonk Jacob Hacker in the past two days. But no matter who is describing the public option, the essentials don’t change: the public option would help control costs both for itself and private insurance, would make it easier to aggregate data on what works and doesn’t work in health care, and gives Americans, who have no such options now, the choice of whether they want a private or public coverage – a choice that all analysis suggests they both want and would overwhelmingly use.

Honestly, isn’t that the whole point of reform – to create a choice for individuals and families that’s affordable, portable and makes them healthier?

Hacker wrote the original proposal for the public option many years ago, but his report is not simply a restatement of the idea but a reaction to so much political confusion about what the idea is and is not. We’ve seen ample evidence of the tendency for “both supporters and opponents to project their greatest hopes and fears onto the idea,” as Hacker says, already this year. Witness Sen. Grassley and others fearing that the public option is a “back-door to single-payer” and would be unable to ever compete in a fair way with private insurance – and progressives hoping for the exact same thing! But that’s not Hacker’s conception at all. The public plan would not automatically be Medicare – it would rise and fall like a non-profit social insurance company should, with no ability to dip into Medicare funds if its costs overrun, no income-based subsidies available to its customers more than to private insurance customers, no using its federal reach to sidestep regional variances in costs that private insurance must deal with due to state mandates on benefits. But nor would it be a passive non-competitor. Without the administrative waste of private insurance, and with a business model that actively seeks to negotiate for the best and lowest prices from providers, and with further innovations to emphasize quality, the public option even divorced from Medicare rates would be a fierce competitor, spurring private insurance to either reform itself to become more efficient and cost-efficient, or get the hell out of the way.

As Jon Cohn writes on The Treatment, “It’s pretty telling, I think, that the insurance industry’s rallying cry against a public plan is, in effect, that a public plan would work too well--that it would draw away business by offering consumers a better deal. I can see why that's bad for insurers. But isn't it good for consumers?”

Even though all that is great – it’s good to know the economics behind the idea are so balanced –it’s too easy to get caught in minutiae and miss the most essential point: we deserve a choice.

Right now, most of us have none. We either take what our employers offer us – a haphazard, inefficient and costly arrangement bemoaned by liberal single-payer advocates and conservative free market diehards alike – we take what government program we can get, or we try our luck on the open market. Unless we’re wealthy or have Spidey-senses attuned to all the tricks of the pre-existing condition cave of horrors, it’s almost impossible to get good coverage at a good price on the open market – if we’d be offered coverage at all -- which is why so many millions go without. Maybe if we’re a state employee or work for a particularly generous corporation, maybe then we're offered some customizations or some different private plans. But most of us just don’t have that option.

Our American mantra is the customer is always right – but the customer can only claim that if he or she can leave at any time and go to a different store.

From Jacob Hacker to the Lewin Group to the polling done by groups like Health Care for America Now!, the number one point of agreement is that if you give the American people the option of constructing a well-designed and well-run public plan, many of them will take it. However, the data also suggests many of them will also continue to choose the insurance they have, particularly since that insurance will also have to reform just to remain viable. The most important part is they’ll have that choice to decide what's best for them -- and the choices offered to them will be ones more likely to control costs and improve quality of care than what we have today.

It’s not surprising that CEOs and corporate titans of the insurance industry, joined by those making money off the waste of the system as it is now, want to deny us this choice and instead force us to buy their products as-is. What is surprising and disappointing is that so many in the Republican party – a party whose 2008 Platform on health care read “We want all Americans to be able to choose the best health care provider, hospital, and health coverage for their needs” – are so willing to say, in essence, “We didn’t mean it.”

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