Last week, protesters in several cities disrupted town-hall meetings on health care that were held by members of Congress. While Democrats claim that the protests were organized by conservative lobbying groups, Republicans say that the response was an unprovoked negative reaction to the Obama administration’s proposals. The White House, which was caught a bit off guard by the reaction, has started a Web site to respond to some of the protesters’ claims.
Liberal groups, meanwhile, have expressed their disappointment that the administration did not support a government-run plan like Canada’s or a single-payer system. Why has that idea seemed to lose support so fast? Is its failure to catch on a good development or a bad one?
* Karen Davenport, Center for American Progress
* Grace-Marie Turner, Galen Institute
* Steffie Woolhandler, Harvard Medical School
* Gail Wilensky, Project Hope
* Charles P. Mouton, Howard University College of Medicine
* Leslie Greenwald, RTI International
Don’t Abandon the Public Plan
Karen Davenport
Karen Davenport is the director of health policy at the Center for American Progress and served on the White House Health Care Reform Task Force in 1993.
With Republicans demanding that the public health insurance option be taken “off the table” for bipartisan health reform talks to move forward, why should reform advocates continue pushing for a public plan?
health care reformJohn Moore/Getty Images A protester in Brighton, Colo., who thinks the Democratic plan does not go far enough.
Because offering the choice of a public plan helps us achieve the goals of health reform — covering everyone and controlling costs. A Congressional Budget Office analysis of an early proposal concluded that premiums for the public option would average 10 percent lower than premiums for typical private coverage. The C.B.O. also estimated that one-third of Americans who qualify for help with their health insurance premiums would enroll in this cost-effective choice.
Economists argue that the public option’s lower premiums would force private insurers to lower their rates, too. Public and private plans have different competitive advantages — lower administrative costs versus tighter controls on the provider network, for example. But the healthy competition of each plan bringing their best game to the insurance marketplace should drive down costs for all: the individuals and businesses who purchase coverage, and the taxpayers who help subsidize premiums for some of these customers.
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The public health insurance option also provides the best platform for health system innovation — the improvements that will drive long-term changes in health care costs. Today’s public plans, notably Medicare and the Veteran’s Health Administration, have historically been national leaders in payment reform, health information technology and other innovations. The public health insurance option can play the same role.
Could we achieve health reform without a public health insurance option? In theory, we could reform the health insurance market, provide new help with health insurance premiums and tackle rising health care costs without a public plan. But we are already struggling over how much to invest in reform and how to pay for it. This will be even harder if we abandon the public option.
Abandon the Public Plan
grace turner
Grace-Marie Turner is president of the Galen Institute, a nonprofit research organization focused on free-market ideas in the health sector.
The White House is recognizing reality as its health reform agenda faces serious trouble and is backing away from its insistence on a public plan.
The public plan option has been a lightning rod for opposition to health reform because many people believe it is a track to a single-payer, government-run system.
The White House must remove the public plan option as the centerpiece of its agenda.
Legislation has passed four out of five key committees in Congress that would establish this new government-run health insurance program — as well as impose mandates on employers and individuals to get and pay for health coverage, drastically expand Medicaid and impose strict new federal regulation of the health insurance market.
People turning out in town hall meetings around the country are not Astroturf groups, as House Speaker Nancy Pelosi asserts, but largely American citizens who are genuinely concerned about the president’s proposals for sweeping reforms that will have an impact on one-sixth of our economy.
What the president miscalculated in putting health reform at the top of his change agenda is that the thing people cherish most about health care is security. Change scares them, as politicians across the land are suddenly seeing.
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The president surely will sign anything that Congress sends him. And he wants to sign a bill this year.
People want to be heard now. They are fearful of this change agenda. The White House must remove the public plan option as the centerpiece of its reform in order to calm the growing anxiety and begin to have a more reasoned debate over meaningful health reform. It may be too late.
What About a Single-Payer System?
Steffie Woolhandler
Steffie Woolhandler is a professor of medicine at Harvard Medical School, a primary-care doctor and co-founder of Physicians for a National Health Program.
“The Health Insurers Have Already Won” reads the cover story in Business Week’s Aug. 6 issue. That’s the short answer to why the public option option is off the table as well as to why the new bill will use an individual mandate to force the uninsured to buy private insurance. Or, more fundamentally, why Congress didn’t pursue the single-payer, Medicare-for-all approach used in other developed nations.
The problem lies with the strength of the private insurers.
The public option was never single payer. Certainly, the option would have cut into private insurers’ profits (that’s why they killed it). But their profits — about $10 billion — are a fraction of what they waste on marketing (to attract the healthy); de-marketing (to avoid the sick); billing their ever-shifting roster of enrollees; fighting with providers over bills; and lobbying politicians. Doctors and hospitals spend billions more on paperwork, none of which the public option would save.
In contrast, single payer would eliminate private insurance, saving nearly $400 billion annually on insurance and provider paperwork, enough to cover the uninsured and plug the gaps in coverage for those with insurance.
In 2007, 62 percent of U.S. bankruptcies occurred in the wake of medical illness, and 77 percent of those in medical bankruptcy had health insurance (usually private insurance) when they first got sick.
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Private health insurance is a defective consumer product, and Congress has no business forcing uninsured Americans to buy it.
In order to get the bill out of committee, Speaker Nancy Pelosi promised single-payer supporters, led by Representative Anthony Weiner of New York a floor vote in the fall. This is a tremendous victory for single-payer supporters like my group, the 16,000-member Physicians for a National Health Program. Members of Congress, many of whom say they personally support single payer, must now go on record on the eve of the 2010 electoral cycle. Constituents take note!
Unnecessary and Not Wise
Gail Wilensky
Gail Wilensky is a senior fellow at Project HOPE. She was the administrator of Health Care Financing Administration (now the Center for Medicare and Medicaid Services) from 1990 to 1992 and the chairwoman of the Medicare Payment Advisory Commission from 1997 to 2001.
For many Democrats, a public plan option administered by the government and offered as one of the choices in a health insurance exchange is critical to health care reform. It is seen as a way of increasing pressure on insurance companies — the “only way to keep private insurance honest” is the phrase used — and of offering more choices to consumers. For most Republicans and some Democrats, a public plan is expected to use the power of government to play by different rules and set below-market rates of reimbursement — like Medicare — undermining private insurance to ultimately become the dominant form of insurance.
A public plan will push costs to the private plans and ultimately make them uncompetitive.
The need for and attraction of the public plan depends on which problems are being addressed. If it’s making sure plans can’t discriminate according to health status, that’s a goal regulation can accomplish. Guaranteed issue and renewability and rate bands are already used in Massachusetts and some other states. In fact, the insurance companies have already offered to support these concepts in exchange for having everyone covered.
If the objective is to ensure there are choices available, the cooperative idea that Senator Kent Conrad, a Democrat from North Dakota, and others have mentioned on a state or regional basis is one strategy for areas that have no nonprofit plans currently available. Of course, it may be that like Part D Medicare, new coverage will bring forward an unexpected number of new plans.
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If, however, the real attraction of a pubic plan is make use of under-market rate reimbursement to produce savings for the public plan, then the concern raised is a real one. Like Medicare already is shown to do, this will push costs to the private plans and ultimately make them uncompetitive. Of course, for some, that is the attraction of a public plan.
A Public Plan Will Increase Competition
charles moulton
Charles P. Mouton, professor and chairman of the department of community and family medicine at Howard University College of Medicine, is the chief attending physician for the Howard University Hospital Free Clinic.
Health reform without a public insurance option will not bring us what is needed to provide adequate health care to the nation and slow escalating medical costs. A public insurance option would spur competition among insurance companies and provide a much-needed blanket of coverage for citizens.
Currently, we have a health care safety net. But our net has too many large holes. Unfortunately, our citizens are slipping through those holes and not getting the health care they need. As a result, uninsured patients are using the hospital emergency rooms for their primary care.
Why are we so fearful of a government-sponsored option for health insurance?
Our current public health insurance plans provide coverage only for seniors, the disabled, certain children and some of the nation’s poor. But while some are helped through Medicaid, many are not, because eligibility is determined by states with differing standards. Consequently, a person covered in California might go without coverage in Texas. And it is nearly impossible for a single male to get coverage under Medicaid. A public health option in the proposed health reform plan would change that.
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Most important, the public insurance option provides competition, the ingredient that historically has spurred growth, innovation and kept prices within reach of the average American. Not having the option just allows the private sector to mandate care for many Americans and stimulate unrestrained expenditures. When one considers that some regions, in some cases entire states, are dependent upon only one health insurance company, the need for the competition a public option would bring is apparent.
We have competition now between the United States Post Service, FedEx and the United Parcel Service. And while most would applaud the innovations and changes to the market and to the U.S. Postal Service that FedEx and U.P.S. have brought, no one is proposing shutting down the nation’s postal service.
Then why are we so fearful of a government-sponsored option for health insurance?
A Way to Lower Costs
Leslie Greenwald
Leslie Greenwald is a principal scientist at RTI International. She has worked at the Health Care Financing Administration (now the Center for Medicare and Medicaid Services) on health care, among other issues, under both Republican and Democratic administrations.
Consideration of a public-sponsored health insurance plan may be waning because of fear of a “government takeover” of health care, despite the modest realities of what has actually been proposed. This development is not good for lasting health care reform because it removes a potential cost-reducing mechanism from the policy debate. The biggest challenge for reform is reducing health care costs. Unless reform includes ways to lower care prices, the costs of health insurance and the amount and effectiveness of care Americans receive, we won’t achieve meaningful change.
A public plan would create strong incentives for private plans to lower their costs.
A public health insurance option is one potential way to lower health insurance costs. Government-sponsored health insurance options, like the Federal Medicare program, have a number of structural differences that make them inherently less expensive than private insurance. Public programs like Medicare operate efficiently, with much lower administrative and operational costs. Public programs devote far fewer health care dollars to marketing and enrollment, and don’t take profits. Medicare administrative costs are less than half those of typical private insurers, saving 5 percent or more of total health care spending. These differences suggest that health insurance competition with a public plan would create strong incentives for private plans to lower their costs in order to compete — lower costs that could be passed on to employers, individuals and other organizations that purchase insurance.
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