While the public option for health insurance remains the main focus of healthcare reform by both the left and the right, it is not the most important piece of healthcare reform. In fact, it is barely necessary.
The most important piece of healthcare reform is the Health Insurance Exchange. The Exchanges would offer enrollees a choice of private health insurance plans, and some proposals also envision including a public, Medicarelike plan. Covered services and cost sharing (i.e., deductibles, coinsurance or copayments, and out-of-pocket limits) would be organized or standardized in ways that make comparisons across plans easier for consumers. The aim is to focus competition among plans on the price of coverage and minimize the tendency for plans to vary benefits in order to attract healthier than average enrollees.
The government would administer the plan. Key to being successful would be the ability to negotiate with the various health insurance providers who would participate in the Exchange. With a pool of 50 million customers, the Exchange would have a huge bargaining chip. The greedy health insurance companies could not avoid trying to get their share of customers.
Therein lies the trap that has been set for the healthcare insurance providers. As they compete for this business they will have to lower their profit margins. So much so, that in the long run, the only providers will end up being the non-profits like Blue Cross/Blue Shield. And, even the non-profits will have to cut back on bonuses and fancy trips if they want this business.
Don't think this is true? Look at the difference in drug prices in Canada compared to the USA. The Canadian government negotiates with the drug companies and because of that Canadians pay much less for their medicine than we do. If properly set up and run by an intelligent director, the Health Insurance Exchange will drive down premiums, lower co-pays, and provide complete coverage for its enrollees.
I can't believe that the health insurance companies are falling for this.