I'm happy the President is attacking the insurance industry, but worried that he's on the verge of handing them a huge victory.
President Obama rightly attacked the health insurance industry yesterday. I am happy to see that the President now understands that the people he spent most of the spring meeting with are not honest brokers, and are motivated by greed--not what is good for the American patient.
The question that faces the Senate now is whether to leave the success of the health care reform package currently being considered up to greedy insurance CEOs, or whether to trust the American people to make wise choices. A strong non-profit, government-backed public option would enable people to opt-out of a health care system where profits are put before patients. It would enable doctors to spend more of their time healing the sick and less of their time fighting insurance denials over the telephone.
The Congressional Budget Office says that a strong public option would save the government $85 billion. A strong public option would reduce costs, increase access, and improve outcomes. But the Senate appears poised to ditch the public option--something which 65% of the public supports--because some Senators are afraid of the words "government run health care."
These Senators are prepared to force Americans, through fairly severe civil penalties, to purchase private insurance from millionaire insurance CEOs. These Senators apparently don't see the problem with forcing the public to subsidize the eight figure beach homes owned by these titans of delay and denial. Last week, big insurers said that if the Senate gives them free reign, and doesn't provide competition through a public option, that they'll raise premiums to boost their profits, and the value of their stock options.
I do understand the need for southern Democrats to say "I stopped a government takeover of your health care." That is why there is one acceptable compromise from a progressive point of view: enabling states to opt out of providing a public option. If reimbursement rates are negotiated nationally by the Secretary of Health and Human Services, and if all states must provide exchanges that meet the minimum standards outline by the HHS Secretary, then exactly how they administer the plan is somewhat irrelevant.
If say, South Carolina, wanted to provide an exchange without a public competitor to private plans, that would be OK with me--as long as the premiums and reimbursement rates were the same as they were for the 50 other states. Likewise, Vermont could administer the exchange through a government option. Doing this would enable the states to be the laboratories of innovation that moderates always want them to be.
I'm convinced that, in time, South Carolina would follow Vermont's lead, and provide a solid public option to its citizens. Our previous experience with Medicare Advantage suggests that using private insurers to administer what is essentially a government plan is just bad policy. Private Medicare Advantage plans cost 114% what Medicare plans cost, and provide the exact same benefits. Once the citizens of South Carolina figure out that their tax money is subsidizing the beach homes of wealthy insurance CEOs, they'll vote in politicians who will stand up for a strong public option.
This is a smart compromise politically. It enables both sides to claim victory. And it doesn't force the country into a spot where it'll be subsidizing the high salaries and lavish lifestyles of insurance CEOs for the next twenty years--until the public finally decides that health care has to be reformed again.