Two articles that have come out from progressive writers take a hard second look at the public option as it is written in both the House and the Senate bills.
Both conclude that the public option may be more harmful than one thinks. As a result, one needs to look again at this plan. The first article believes that a STRONG TRIGGER is the way to go and the 2nd article raises serious concerns about the public option in general.
Trigger is the BEST option for Health Care Reform
http://www.politico.com/...
The original article by the Washington Urban Institute.
http://www.urban.org/...
Perils of the public plan
http://www.prospect.org/...
Instead of taking a knee jerk reaction about the public option, I think it is worth taking a hard look at what is being advocated in these bills. I think these articles raise valid points.
One of the concerns about the public option as written in Congress' bills is that it isn't robust enough to be effective. As a result, if written improperly it may do more harm than good.
Well 2 articles argue just that.
First article: Trigger is Best Option for Health Care Reform
http://www.politico.com/...
This article argues that a strong tigger is actually better for health care reform than the weak public options as written the House and Senate bills (The White House position).
The paper, from the Washington-based Urban Institute, offers a fresh look at the whole public option debate, casting the issue as "one of fiscal conservatism" — more about containing health costs than extending benefits to the uninsured.
The author is NOT advocating for the weak Snowe trigger but for a much stronger one.
Its authors accept the likelihood of a trigger as proposed by Republican moderates but suggest it be tied to proven government data on national health expenditures rather than some new index to measure the affordability of coverage. And, in effect, the health industry would be given a three- to four-year test period to show its ability to slow the growth in costs.
Failure would trigger a more powerful public insurance competitor than either the House or the Senate has yet embraced — one that challenges not just the market power of insurers but also providers, especially hospitals.
"A strong version is necessary because there is little else in health reform that can be counted on to contribute significantly to cost containment in the short term," the authors write. A trigger means delay, but "even the threat of such a plan being triggered offers the potential to affect market dynamics between insurers and providers."
The author argues against the watered down public options written by Congress.
By comparison, if only a watered-down public option survives and costs continue to rise unchecked, both insurers and providers face the prospect of even greater government regulation of private-sector prices, the authors warn. "Indeed, a strong public option competing on a level playing field with private plans paradoxically might be the best 'last chance' for competition to work."
The author makes this conclusion.
"I would rather have a hard trigger to a strong public plan than settle for a weak plan now that is doomed to fail," Robert Berenson...
The Second article was written in June BEFORE the Congressional bills were written but raises valid concerns that can be applied now:
Perils of the public plan
http://www.prospect.org/...
According to this article a badly designed plan could turn out to be the opposite of what progressives intended (CBO's position).
The author believes in the public option but raises valid concerns.
A public plan is not a bad idea -- indeed, it could be a critical element in successful reform -- but it could also easily turn out to serve the opposite purposes from the ones progressives intend.
The first concern is one raised by many including Senator Wyden and CBO.
The great danger is that the public plan could end up with a high-cost population in a system that fails to compensate adequately for those risks. Private insurers make money today in large part by avoiding people with high medical costs, and in a reformed system they'd love a public plan where they could dump the sick. Although the proposals before Congress aim to limit insurers' incentives to skim off the best risks, the measures are unlikely to eliminate those incentives entirely.
Entry into the public plan for the eligible employed would be a two-stage process. First, employers would choose between paying into the exchange and buying insurance directly to cover their workers. Unless the exchange is such a good deal that nearly all employers take it, firms with a young, healthy work force would tend to buy insurance on their own, while those with higher-cost employees would go into the exchange's pool. As a result, the pool would suffer "adverse selection" -- it would get stuck with a higher-risk population.
The second concern can be applied to the weak public plans written by Congress:
Second, within the exchange, the government-run plan would compete against private insurers, yet it would likely abstain from the marketing strategies used by private plans to avoid high-risk enrollees. This double jeopardy of adverse selection could then more than nullify the advantage the public plan derives from its lower overhead (as a result of less money going for salaries, profits, and marketing).
Here is a delicate concern:
Here's the delicate political problem: Depending on the rules, the entire system could tip one way or the other. Unconstrained, the public plan could drive private insurers out of business, setting off a political backlash not just from the industry but from much of the public. Over-constrained, the public plan could go into a death spiral itself as it becomes a dumping ground for high-risk enrollees, its rates rise, and it loses its appeal to the public at large. Creating a fair system of public-private competition -- giving the public plan just enough power to offset its likely higher risks -- wouldn't be easy even if it were up to neutral experts, which it isn't.
The author's conclusion:
There are a lot of ways to defeat reform, not just by blocking it entirely, but by setting it up for failure. Those who think a public plan is a good idea no matter how badly designed are not thinking ahead.
My personal belief is the public plan if written well can do what it is intended to do which is increase competition and lower costs. However, as these authors raise the weakend public plan as written in the House and Senate bills may not do that very job.
As a result, the first article advocates for a strong trigger over a weakend public plan. Senator Whitehouse actually talked about this on Keith Olberman's show on Monday. That makes me think that in the end that is the way the Senate is going to go with a strong trigger. Since LIEberman is threatening to filibuster even with a trigger, the bill will need get get Snowe on board (and possibly Collins) to pass if there is no reconciliation. At this point Reid is not going the reconciliation route because a lot of what is important in the bill wouldn't make it through that process.
Thus expect A LOT of discussion about the trigger in the next few weeks.