The debate over the inclusion of a public option in the healthcare reform bill rages on, and while the White House has, again, reiterated the President’s support for a government-run option, they have not ruled out signing a bill without one. Former HHS Secretary nominee Tom Daschle also supports a public option, but doesn’t want it to be a deal-breaker.
Tell that to the 76% of Americans who, in a recent poll, expressed support for a public option. I wonder what that number would look like if the question included a mandate that all Americans purchase coverage, which the final bill amost certainly must. Requiring insurance companies to cover pre-existing conditions only works if there’s a mandate.
A mandate without a public option creates a captive consumer base, with 46 million new members. I guarantee you that, overnight, a plethora of new insurance products will be created to satisfy the minimum requirements of the mandate. Without strict and extensive regulations, many of these will undoubtedly be worthless to the consumer, and hugely profitable for the insurance carriers.
They will design plans that have high deductibles and coinsurance (check out 2007 national averages), that contain as many limitations and exclusions as the law will allow, and sell them to people who can’t afford anything else. These plans will cover as little as possible, and pay out as little as possible. Think of auto insurance. Everybody has to have it, but when was the last time your auto insurance paid something for you?
One of the boogiemen that opponents of a public option cite is the notion that “bureaucrats” will decide which services are authorized and which are denied. Of course, this is true of private health insurance plans, as well.
The criteria used to determine medical necessity are fairly uniform, but the devil is in the application of those criteria. The key difference between a public and a private insurance plan is that the private plan’s bureaucrat has company profits to protect. If you have to choose between two guys, looking at the same facts, and the same guidelines, do you want the one with his eye on his wallet to decide if you get your new liver?
The notion that a public plan will put all other insurance companies out of business is self-defeating. If everything public option opponents say is true, then private companies should have no trouble competing with a system that crummy. They can’t really have it both ways.
The truth is, even with a public option, insurance companies will make out. Not only will they undercut the public plan with the barely-there products I described before, they’ll also be able to create a whole new market of gap plans, low-cost insurance plans that will cover copays, etc., that the public plan doesn’t.
All of the Chicken Little-ing by opponents of the public plan is simply an attempt to preserve the status quo. The government hasn’t put anyone out of business before. The US Post Office has a healthy slate of competitors, there’s no shortage of private schools, and the last time I checked, defense contractors aren’t wearing the barrel-and-suspenders getup.
What a public option does is give people a safety net, so they’re not left to the tender mercies of the health insurance market that put us in this position in the first place.
President Obama should not even consider signing a bill without a public option. This may be a first bite at the apple, but if it doesn’t go far enough, the next step will be backward, not forward.