Healthcare Bill Without Public Option is Huge Giveaway to Insurance Companies

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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.

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9 Comments

  1. Mr. Christopher,

    Why don’t you call things by their proper name? Public option=Taxpayer Subsidized option. You said that private insurers are only looking at their customer’s wallets. Government bureaucrats don’t because they can undercut anyone. They work with our money and you only have to look at the mess at Medicare to see how that’s working.

    “If current spending and utilization trends continue, the Medicare program is fiscally unsustainable. . . . Part of the problem is that Medicare’s fee-for-service payment systems reward more care — and more complex care — without regard to the quality or value of that care.”

    An that 46 million uninsured number have already been proven inaccurate, but hey is a nice little round number, 46 millions sounds like a lot so it’s easy to play with people emotions with it. The reality:

    -9.7 millions were not U.S. citizens
    -17 millions live in households where the annual income exceeds $50,000.00; 7 Million of those without coverage have income of $75,000 or more (I don’t make that much, so can you explain to me why I, as a taxpayer should subside the health coverage of people that make more than I do?)

    You can find the 2007 census report here and see the number for yourself. Obama, Reid and Pelosi control the government now, no credible opposition. Have them show us they can fix Medicare and Social Security if they want to convince the public that they are to be trusted with our health care.

  2. The poll question is misleading on its face.

    The presence of the phrase “public option” gives an enormous boost to the number of people who answer affirmatively. The number of people who have given any study or consideration to healthcare (or any other issue for that matter) is far lower.

    If you asked people if criminals should be given a public option for execution, they’d be overwhelmingly for it.

    If you asked a random sample whether people late on their rent should have an option of eviction or forced relocation, many would vote for it (even if it is nonsense.)

    When given a choice to vote for “choice,” Americans are inclined to vote Yes without knowing what the choices are.

    That’s why I am suspicious of the 76% number.

  3. It would be nice, if someone would write a piece, explaining what all these terms mean, the pros and cons, and how we can expect to be effected by each choice that is avalible or that is being considered….

    its becoming all too confusing, what is the best choice for us…what will it cost us, and is that cost “worth it” in the long run…

    I would hate to see us shooting ourselves in the foot down the road…

    And I so totally LOVED the REPUBLICAN Plan…..HA…just like their budget…BLANK!!

    Paleeeze.

  4. Ike, one quick question.
    Are you Pro-Life, or Forced Birth?
    Just kidding.
    I get it though. Parsing words, all these secret code phrased….sheesh.

    See we’ve already forgot that the word empathy is really supposed to mean liberal activist.

  5. Michelle, I beg your pardon. The republican plan is not a blank.
    The boys on K street just havent rolled it out ….yet.

  6. Ah….thats a blank in my world, sekanblogger…

    roll it out when ya got one boys….thats what Im stressing…

    yet, what does yet actually mean…Republican wise that is…and isn’t that the same thing they said about “their budget”?

    I really don’t recall when YET happened on that….I musta missed that days news…

    LOL

  7. I just googled health care republican plan and the first news item is from those right-wing water carriers at the Huffington Post:

    “Republicans in Congress are slated to unveil their health care reform plan on Wednesday, a proposal that relies heavily on private mechanisms, contains no individual mandate, and offers tax incentives for families and individuals to help pay for coverage.

    Titled “The Patients’ Choice Act of 2009,” the plan will be introduced by U.S. Senators Tom Coburn, (R-OK) and Richard Burr (R-NC) and U.S. Representatives Paul Ryan (R-WI) and Devin Nunes (R-CA) at 11 a.m.”

    So I keep looking and next googled “The Patients’ Choice Act of 2009” and got congressman Paul Ryan (R Wis.) page with the introduction of the Republican alternative. There’s a video too for the reading impaired or in a hurry. It took me less than two minutes and I was not even trying.

  8. Sekan – I am a communicator by trade, and a former journalist (and a damned good one at that.)

    I know very well how selection of terms can frame discussion and thought, and lead to more favorable outcomes.

    We know both sides do it. I’m just a little more discriminating about which ones I am going to trumpet as objective fact, particularly on a subject that few truly understand.

    Before anyone bothers playing the “let’s see which hole we can slot the new peg into” game, I’ll declare myself a lowercase-L libertarian. I like my government like Californians like their farmer’s markets: as small and as local as you can get, because the dirt is local dirt and doesn’t spread.

    Health care? Let the states compete with each other. At least if there are 51 single-payers, they’ll learn from each others’ mistakes and neighbors will hold neighbors in check with regard to pricing and features. (Imagine how competitive Tennessee would be, with 10 contiguous states!)

  9. Ike, you are a man after my own heart.
    We must not let ‘he said-she said’ MEDIA (not journalism) dominate the agenda!
    They never present facts, just yelling points without conculsions.
    We need real journalism IN PRINT. Forever.


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