Sunday, June 21, 2009

One Nation Under Medicare - Obama Must Make Insurers Compete

But why would we want more Medicare? Isn't Medicare a mess? Well, yes and no. The fabulously popular free health-insurance program for the elderly is running out of money, thanks to exploding costs. But the administration of Medicare is a miracle of low overhead and a model, despite all the fraud and abuse, of what government can do right. Three percent of Medicare's premiums go for administrative costs. By contrast, 10 to 20 percent of private-insurance premiums go for administrative costs. Roll that figure around on your tongue. When you swallow and digest it, you'll understand that any hope of significantly reducing health-care costs depends on a public option.
That takes us back to a public option, which would force insurers to redraw their business models and accept lower profits. The House bill will include it, but the Senate's almost certainly won't. Instead, moderates there are pushing health-care "cooperatives." Nobody has a clue what that means. Would the co-ops be like utilities? Farm cooperatives? Starting fresh with a quasi-public/quasi-private organization might bring some much-needed creativity to health-care financing. But without a federal charter and some seed money to help them enroll millions, co-ops will get swamped by the private-insurance lobby, which has become expert at marginalizing state-run experiments.

When it comes time to hammer out the final plan in the House-Senate conference committee, Obama and Rahm Emanuel will likely make the House accept a reduction in the deductibility of employer-based plans and make the Senate accept some kind of public option or co-op with teeth. Anything less means the president didn't get the sucker.

Read More - Jonathan Alter at

Single payer removes the complications, is affordable and sustainable - yet they still keep it off the table...

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