Tuesday, September 29, 2009

Public Option- The Means or the End?

Finish LineImage by MikeSchinkel via Flickr
Several of my more liberal/progressive friends are wringing their hands over the fact that the public option may not be part of any health care reform we get this year.  They feel like they're being defeated, abandoned or both. I think it's a little too early for us supporters of a public option to start panicking.

I am a supporter of a public option.  But, it's not the end, it's a means to an end.  The end we are trying to achieve is affordable, accessible health care for everyone in the country.  One way to ensure affordable coverage is to encourage more competition.  Competition is great at driving prices down and keeping businesses honest.  The public option is a great way to ensure competition in the health care insurance market.  But, having a government run option for health insurance isn't the goal, it's a way of reaching the goal.

For the record, I am still in favor of a public option because it seems to be the simplest, most effective way to make sure we have at least one major provider who is competing with the best interests of the clients in mind.  I haven't heard a better idea.  A public option that was forced to survive based on the premiums it collects would be a benchmark that others would be forced to compete against.  But, if the public option is displaced by a better idea that gets us to a market where everyone can afford health insurance and everyone has access to buying health insurance, I will not be upset that we "lost" a public option.  Let's keep our eyes on the finish line.



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19 comments:

Jeff said...

A public option that's forced to rely on funding through premiums wouldn't be an improvement over the private healthcare industry...they'd be forced to cut costs in the exact same way, by denying coverage or jacking up costs for sick people.

Joe said...

I think a Public Option is a necessary component of reform. We need consumer protection regulation of the insurers. We need to reduce administrative costs and errors with technology. We need to provide a Public Option to control the cost of private insurance.

Although Medicare needs to be improved it demonstrates to me that the government can provide and properly administer health care insurance. The Public Option would be better funded than Medicare is currently because Medicare is only partially funded by the insured whereas the Public Option will be totally funded by the insured.

Keep in mind that the Public Option is OPTIONAL. Most people are insured through an employer and will choose to continue that way.

brian said...

Thanks for your thoughts Jeff and Joe. I do want to emphasize I am not against a public option. I still think it's the fastest and easiest way to get the consumer choice and fair pricing that we all want to see. And, yes Joe, the public option is optional. The expectation is a fairly small percentage of people will be on it. The plan is for most people to remain with their private insurance.

Jeff, neither the public option nor the private insurers would be allowed by law to do what insurance companies are doing today. They'd have to take sick people as "loss leaders" if you will. They would not be allowed to pick and choose the most profitable clients. Insuring the currently uninsurable would be the cost of admission to get at the pool of the young healthy people who are not currently insured but who would be legally obligated to start buying into the pool. Private insurers will insure the sick if mandated to. And the intent is not for the public option to operate at a loss by insuring only the leftovers. The intent is for the public option to be self-sustaining.

coachscully said...

Okay here we go again, I won't try to convince anyone why a public option is a bad idea by using simple economics; I have tried that and it seems that no one takes economics 101 anymore. It is now that I will use a personal story to try to convince people that our government is incapable of handling yet another program.

Six months ago I found myself on the wrong end of yet another company downsizing and became unemployed. At the time my wife was already in school pursuing a degree in veterinary medicine; and even though it was going to be very tight economically we decided that due to the current employment outlook, that I too would enroll in school. Three and a half months ago I got custody of my youngest son, and because of the situation we applied for medicaid for him. At this time, because of some archaic rules, I am still paying a small amount of child support (my ex has our daughter, I have our son), as well as paying for my sons medicaid premium. While I understand that I should pay for some of the cost of medicaid, one should expect to be personally responsible for these things, here is my complaint; for 3 1/2 months, by court order the medicaid premiums have been taken from my unemployment check and yet we have no medical coverage for my son. After dozens of phone calls (all documented), our case worker has yet to file the paperwork (she works in the office 1 day a week), the department supervisor has not returned phone calls or responded to registered letters, and the department head at the state level has returned only a form letter that was addressed to customer (not even our name). So my point, the government is inadequately prepared to handle any sudden influx of people into the system. The government, my government, your government has received their payments I have received nothing, not even so much as an acknowledgment of paperwork received. Gov't interference into yet another aspect of our lives...NO NO NO.

brian said...

Kevin,

I understand you don't want the government involved in health care insurance. I also (believe it or not) understand basic economics.

Furthermore, I understand that tens of thousands of people die in this country every year because they don't have health care coverage. Coverage they don't have because they can't afford it or because the insurance companies won't sell it to them. I understand that we pay more for health care than any country on earth while ranking 37th in health care outcomes. So, my question for you is what is your plan since you are against what is being proposed?

Joe said...

Although Coach Scully has yet to receive the benefits that he is due, he will receive them. What would he do if Medicaid did not exist? Rep. Eric Cantor (R-VA) suggested last week that a person in Coach Scully's situation should seek support from a charity when private insurance is not affordable. A great alternative to health care reform and I'm sure that the charity's benefit payments will be timely and adequate.

Because Medicaid is a state administered program the coverage, benefits and performance of Medicaid varies greatly from state to state. The issue in this case is not with the Federally mandated Medicaid but the administration and funding of it by Coach Scully's state. Each state determines what services will be covered and how much of the cost will be refunded.

Adequate funding by the state is critical to the performance of Medicaid. The good news is that the Public Option, if it is passed, will not rely on taxpayer funding; it will be fully funded by the insured just as private insurance is.

If Coach Scully doesn't want to rely on the government programs or charity, he can opt to quit school and take any job so that he can pay for it himself. If he's lucky his employer will provide medical benefits.

coachscully said...

Brian,

Part of the reason that we as a country rank low on the so called health care outcomes is because as a society we are generally lazy (lack of exercise), eat a poorly balanced diet, smoked and drink to much, and have the highest rate of drug addiction anywhere in the world. These things cannot be legislated against, at least not in the case of exercise, and diet (unless of course you want to be told what you can eat, and what your daily schedule should be).

Part of my plan would be for the federal government to repeal the law that allows states to ban out of state carriers from selling insurance plans in their state (that increases competition), reform of medical malpractice lawsuits (it's insane for a dr. to have to pay such high malpractice insurance rates because they are scared of being sued for millions of dollars because of a hangnail). Decreasing malpractice costs also decreases the costs of medical supplies and implements due to a lower overhead, $40 for an ACE bandage in a hospital that you can buy for $3.20 at the drug store is ridiculous. These things would be a start although not an end all.

coachscully said...

Joe,

Funny you mention a non profit charity, we had to do just that when my son came down with an ear infection, took them all of an hour to call me back with a Dr's appointment and a guarantee that his prescription would be covered (imagine that).

Secondly, you are one of the ones I was referring to, one of those that has no understanding of basic economics. You state that the public option would not be funded by taxpayers, and that it would be funded by the insured....just who do you think the insured are Joe, they are taxpayers you and I. Just so you know, the public option, in it's current form would actually be paid for by the insurance companies as an added fee, and not directly by the insured, although those costs would eventually be passed down to the holders of the policies.

Lastly, I did have a job which offered medical benefits and it was a good plan, self funded by the company. Interesting to note on that, is that there has been some debate as to whether self funded plans would qualify (by the governments definition) as an adequate insurance plan; therefore quite possibly leaving all the people covered by such plans with the option of either switching to another higher cost plan, or choosing the public option (which from my previous example will be handled badly), or going without insurance and facing a fine...not much freedom there.

brian said...

Kevin,

I don't know how "normalized" the data has been concerning our health care outcomes. We can talk about our lack of exercise, our high rates of shooting each other, etc. The bottom line is health care is breaking us in this country. Regardless of the outcomes, we still pay more than any nation on earth and we have a lot of uninsured people.

Thanks for outlining part of your plan. You're right. It's just a start.

brian said...

"You state that the public option would not be funded by taxpayers, and that it would be funded by the insured....just who do you think the insured are Joe, they are taxpayers you and I."

C'mon Kevin. Using that logic, everything in the country is funded by taxpayers because we are all taxpayers. You know good and well that Joe meant that tax dollars will not be used to fund the public option. The public option will be funded by the premiums of the insured.

Yes, there has been talk of fees paid by the insurance companies. In all honesty I'm not sure if the intent of those fees is to go to funding the public option or for the financial assistance that will be given to those who cannot afford health insurance and will be mandated to buy it. I'm pretty sure it's the latter. But, the point is the public option will not be funded by tax dollars.

Kansas Bob said...

Don't hear too many folks advocating for Medicare to be expanded.. wonder why? Seems like it could at least be expanded to cover those who are not already covered by another insurance plan.

Joe said...

Bob,

The expansion of Medicare was proposed. It's called the Single Payer system, which eliminates all private health care insurers. It's also called Universal Health Care.

The Public Option should only be funded by premiums paid by the insured, which makes it different that Medicare.

Medicare could be improved by increasing the coverage and benefits.

Medicaid should be improved to mandate that all states provide the same coverage and benefits.

Kansas Bob said...

Thanks Joe. I have not understood that the Universal Health Care public option will be know as Medicare.. where did you hear that?

Kansas Bob said...

Just reread your comment Joe.. guess I had not seen the difference between UHC and the Public Option.

Would the public option be subsidized by tax payers like Medicare? If so then how would it be different?

brian said...

Bob,

I think what Joe means is that there were those who wanted true Universal Health Care which would have includee a single payer system and that the single payer would be Medicare. That would effectively put private insurance companies out of business. AFAIK, that proposal has not made it into any bill being given serious consideration. But, universal Medicare or a single payer option has most definitely been discussed.

Kansas Bob said...

Still confused.. will the public option will be funded exclusively by those it insures or by taxpayers who already have private insurers?

brian said...

Bob,

My understanding is the public option will be funded by premiums from the insured. IOW, those who opt into the public option will pay premiums that will fund it and no taxpayer money will go to the public option. However, I believe there is a proposal to assess fees on private insurance companies/policies that may fund the subsidies for those who cannot afford health insurance. I think some are using that to say the public option will be taxpayer funded or funded by people with private insurance. But, my understanding is the public option is to be self-funded.

annie said...

well balanced view brian. and 'blessed are the flexible for they shall not break'. fundamentalism comes in all forms. it misses the forest for focusing on the trees. you've expressed the big picture. kudos.

Joe said...

I didn't realize that the discussion had continued. The public option is a government provided insurance that is generally paid by the insured so that taxpayer money is not used. The public option would not be considered by most of the people because the majority are provided health care coverage by their employer. If your employer does not provide health care insurance (small employers are not required to provide it) or you are retired but not old enough for Medicare, you will have to obtain insurance as an individual from a private insurance company or from the public option. Another proposal for the individual was to join a coop and acquire insurance as a group having more bargaining power. The Coop would not have been funded by the government.

There are going to be many who still can't afford health insurance even when its cost is reduced by reform improvements. I believe the government will reduce their income tax by allowing a deduction or a tax credit for part of their premiums. The government will have to recover their cost of the subsidies to the low income family by increasing the tax rate of high income persons and/or taxing the employer contribution for high-end health insurance. For example, the goverment would continue to NOT tax the employer contribution to the employee's health insurance up to a maximum allowance. Any contribution in excess of the allowance would be taxed. A tax on high-end insurance policies alone might not be nearly enough money to pay the subsidies to insure low income people. I think the subsidies will have to come from increasing the tax rate on all taxpayers or only on taxpayers earning more than $350,000 or $500,000 (I not sure what the minimum taxable income proposed is).