I know that the Democratic leadership in the White house and Congress have rejected the idea of moving outright to a single payer system. What they have offered instead is the option of buying into a "public option". First, what does this mean? secondly, how can they sell this idea to the American people and to a skeptical Congress?
The public option is typically defined as some new and enhanced version of Medicare that would cover all of the things that a typical group health insurance plan like you'd get from your employer would--or, to be more precise, it would provide the same coverage that government employees get through the FEHB but without the private insurance middlemen. For those of you unfamiliar with Medicare, it's full of holes in coverage that you either fill with "Medigap" insurance (a private plan which you have in addition to traditional Medicare) plus a private "Part D" plan for drug benefits. Alternately, you can purchase Part C/Medicare Advantage coverage through a private insurer which provides you with a (subsidized) full insurance plan covering everything that Medicare Parts A, B, and D + Medigap coverage covers. Essentially the government would be offering its own public Part C coverage but to the general public, not just to those over 65.
This public option would compete directly with private insurance in the group and individual policy market. In order for this competition to be fair, private insurance would have to be required to take all comers and charge the same rates regardless of pre-existing conditions. Otherwise, the government would get stuck with all of the sick folks and the private insurers get all the healthy people. This coverage would be subsidized by the government based on income and people will in some fashion be required to get coverage. Sounds reasonable? Why shouldn't people get the choice?
Here's why this is opposed by conservatives and industry groups:
- A rigid ideological belief that government is always, always, always bad (except for the military and the police!).
- The belief that the new public Medicare plan would be "unfair" competition for the private plans because it could essentially dictate low fees for services instead of being forced to negotiate with medical providers on prices like private insurance plans are. Medical providers would shift costs to private insurers making them less competitive and eventually driving them out.
- The belief that under a system where the government is the largest insurer, they would cut costs so low that hospitals would have to cut back and/or close and everybody would loose out, being forced to wait months for standard operations.
Here are some ideas that the Dems can use to address these concerns:
- First and foremost, they need to clearly communicate that government administered health care systems are more efficient, lower cost, and most sustainable than our current system. People have only heard the right's horror stories for the past few decades about "socialized medicine". People need to be shown that this actually works in other countries and it works better than our system. The fact that people have the option of buying private or public insurance under this new proposed system will help assuage peoples' fears. They'll see that they have an option if they don't like the public plan. This is one political benefit the proposed reform has over a pure single-payer approach.
- Add an additional surcharge on top of the cost of the new public plan. The public plan will cost less to start with than either existing Medicare or private plans so it will still be affordable. It will be cheaper than traditional Medicare because the people insured will be younger and healthier. It will be cheaper that private insurance because it will have smaller administrative costs and no profit taking. The surcharge could be used to subsidize the cost of the existing ailing Medicare program for seniors. This could be a huge selling point for such a plan: not only does it expand affordable coverage for every American, it always secures the Medicare program for our seniors. This surcharge could help with industry acceptance of such a plan: it would give the private insurers a handicap in the competition that they claim to be unfair.
- To address the concern that the public plan is unfair competition, the new public plan could be required to negotiate prices with medical providers like private insures instead of how Medicare dictates them. I'm not totally in favor of this idea. One of the benefits of the public plan is that it can set lower prices than private insurance. Medical providers still have the choice to accept patients with public insurance or not. A plan like this would look just as if the Government founded a new insurance company. Now, there would still be benefits in this: the public plan could still serve as a "model plan" following best practices such as paying for performance and evidence-based medicine, covering all the right things, etc. However, I see the idea of the public option competing with private insurers as more of the competition of one type of health care system with another and not with one type of health insurance policy against another.
- The public plan could serve as a back-up to keep the private insurers honest. Under this strategy, the reformed health care system wouldn't include a public option right away but would set up a regulated marketplace of "managed competition" of the private plans like in the Netherlands and Switzerland. The government would reserve the right to open up Medicare to everyone under 65 as a sort of pressure valve only if the private plans failed to hold down costs and benefit consumers. The public plan would become available automatically in the marketplace if the desired goals aren't met. The danger is that in 4, 8, or maybe 12 years from now, we may see another political shift in the GOP's favor. At that time, they could strip this provision and a huge profit taking party would ensue among the private insurers no longer with the threat of the public plan hanging over their heads. However, I think this plan would be an easier sell than outright adding the public option, if in part because of this weakness.
- If there is a public plan in the reform plans, the government must avoid the temptation of cutting payments too low. This could lead to the third concern coming true. One way to do this would be set fees at a reasonable level--somewhere between current Medicare fees and private fees and adjust them automatically for inflation every year. The danger is that the government--wanting to cut costs or lower taxes would cut fees and harm therefore harm the system.
Thought? I know I spend too much time thinking about this stuff...