We Already Have a "Public Option" -- It's Called Medicare

Senator Charles Schumer indicated earlier this week that Democrats were fleshing out plans to pass health legislation, particularly the option of a new government-run insurance program, with a simple majority, instead of the 60 votes that would ordinarily be needed to overcome a filibuster. Typically for the party that still seems to suffer from an acute case of "Stockholm Syndrome", the Democrats continue to agonise about using their substantial majorities in Congress to fight for what they really believe in and question whether to use a budget reconciliation procedure to incorporate a public health insurance option in the legislation.

We've got a better idea for the Democrats, which will enable them to pass a bill without resorting to controversial Parliamentary procedures, whilst still incorporating a public health care option:

Expand the provisions of Medicare.

In the words of New York Congressman Anthony Weiner let's do, "Medicare for all Americans." Since its inception in 1965, Medicare has covered almost all citizens over age 65, and it is one of the most popular government programs existing today. Individual state-managed health programs with low reimbursement to caregivers cover additionally most children with congenital malformations and children with many other disorders. For low-income families, the combined federal and state-managed Medicaid program is available for the majority of medical disorders that are not primarily cosmetic. Why not expand its role to incorporate citizens not covered in any of the existing private health insurance plans? Why not, in fact, allow Medicare to compete against private health insurance companies in order to keep them honest?

The implicit presumption underlying the arguments of opponents of a public health insurance component is that it will add another layer of complex bureaucracy to an already overencumbered health care system, and offer a "consumer unfriendly" service, vastly inferior to supposedly consumer friendly private health insurance plans. (Private plans tend to be "consumer friendly" until the consumer attempts to exercise his/her right to comprehensive medical supposedly paid for by the increasingly exorbitant health insurance premiums.) But even if we accept the logic that a private health insurance program is invariably more efficient than a government administered option (which we don't, for the record), why do these very same health insurance providers argue that a supposedly inefficient government run health plan will create "unfair competitive advantages?"

In fact, few Americans rail against Medicare or characterize their experiences as something akin to a Kafka novel. As a program, it has great political legitimacy and is as strongly entrenched in the American political landscape as our Social Security system. In 1963, most elderly Americans had no health insurance. Few retirement plans provided any such coverage. The poor had little access to medical treatment until they were in critical condition. Only wealthier Americans could get the finest care, and only by traveling to a few big cities like Boston, Chicago or New York.

In 1966, 19 million were enrolled in Medicare; in 1998, 39 million. Today, 43 million of Americans are covered by the program, yet seldom does one hear a senior citizen complain about struggling under the burden of "socialistic health care". The program, while not without its flaws, has displayed significantly less cost inflation than private insurance. At 4% per annum its administrative costs less than half of most private insurance companies and polls consistently show very high satisfaction among its participants.

So why does Senator Kent Conrad continue to suggest that there are not enough votes in the Senate to pass a public option for health insurance? It would be interesting to see what would happen to Senator Conrad's polling numbers in his own state were he to suggest that the government disband its existing public option - Medicare - in the interests of costs savings. Even the Republicans aren't dumb enough to make that proposal, which makes one wonder why the Democrats don't do the obvious and simply incorporate the program into a broader health care reform measure.

Healthcare gets complicated when it's built around profits rather than care. Private insurance companies largely generate profits by carefully screening applicants to identify those with a high risk of needing expensive treatment, and either rejecting such applicants or charging them higher premiums. But such screening is itself expensive. Furthermore, it tends to screen out exactly those who most need insurance.

Most advanced countries have dealt with the defects of private health insurance in a straightforward way, by making health insurance a government service. Through Medicare, the United States has in effect done the same thing for its seniors. To be sure, Medicare is not fully adequate to cover all of the medical needs of seniors, and it would be foolish in the extreme to "finance" a new public health care option by cutting "waste" from the very supplemental program payments to private health insurance companies that make Medicare in its current incarnation affordable to most American seniors. To cut Medicare to finance an additional public health insurance option is akin to cutting one's nose to spite one's face.

Ed. note: This is an updated version of this post.

For more of Marshall Auerback's argument, including specifics on Medicare expansion, visit NewDeal2.0.

Comments

[captnEarl]

Have a very good day moderator

[captnEarl]

stop foreign aid except for humanitry reasons, stop arming our friends and their ememies...

[creolechild]

If you are concerned about receiving "real" health care reform in this country, please take the time to watch a video on our current system. The video was created by Oregon physicians who are advocating for the single-payer option. The video is very informative and helped me to gain a better understanding of various aspect of health care, as we know now it.

https://www.madashelldoctorstour.com/Mad_as_Hell_Video.html

These Oregon physicians are in the process of organizing a caravan designed to inform the public about the benefits of the single-payer option. At last count they will be stopping in approximately 23 states, on their way to demonstrate in Washington. They need volunteers and our support. Please spread the word.

[Samalabear]

Thank you for watching this and learning more. The information is out there. I truly believe that if Obama went out there and did this same thing the support would have been deafening and the opposition from the lunatic fringe would have been exposed for what it is -- utter nonsense.

[vsign]

"To cut Medicare to finance an additional public health insurance option is akin to cutting one's nose to spite one's face." Marshall Auerback


I agree. But it feels inevitable that Obama's administration handled it this way and caused such turmoil among seniors given the message and tone of his campaign - which I found to be very ageist and sexist.

[NotaCommunist]

Is everyonen blind??? Medicare is trillions of dollars in the red and getting worse every day. And this joker wants to add more people to it?

[mummblemouth]

Funneling a small portion of the money wasted on private insurers (entities which produce nothing nor add anything to the transaction of health service for the estimated $15,000 per year per policy) would easily balance the program. Reduce fraud by cracking down on people like Rick Scott (republican, lobbyist, ceo of the health company to receive the largest fine for fraud and founder of Conservatives for Patients RIghts - the gang organizing anti-reform mobs). Then give the finger to the pharma companies and use all of our collective negotiating power to finally get just prices.

[captnEarl]

How about this joke...We provide the middle east with billions of our tax dollars each year so some of the countries , Israel for example can provide health care for all...yet we cannot do the same for our people...nothing will change unit we stop being a world dictator and empire builder.. remember what happened to the UK.

[krechsd]

Works for me.

[grogan1964]

I think your idea is excellent. There are just two points that are of concern for me.

First, I think there should be an income limit for the program to be completely free. Then there after, some type of "monthly fee" tier system based on income.

Secondly, I still worry about cost control once you have millions of more people join. I just really have a hard time believing our government is in a position to handle this properly.

However, I would be much more open to your proposal than creating an entirely new bureaucracy.

[rpahk]

Agree. Make everyone pay a monthly premium and a co-pay based on their income levels with the amount calibrated to make the program revenue neutral. Essentially a nonprofit insurance scheme. By requiring premiums and co-pays, you generate revenue and a degree of cost containment as paying something for services rendered puts the patient in a position to find cost effective solutions.

[mummblemouth]

A system similar to this is used in S. Korea and is acceptable as far as I'm concerned.

[Maltese]

Now, why didn't I think of that?? :) For that matter, why haven't I heard anyone bring this up before now? Kudos, Mr. Auerback! I look forward to hearing this debate.

[SCmommy]

Amen.

What I want to know is why someone doesn't just say, "Okay--you like Medicare? It's not socialized medicine, and it's fine? Then let's just waive the age requirement, and sign up the whole GD country."

Seems to me it would solve the whole thing, and shut 'em up in the process. They don't DARE criticize Medicare, or they'll have all the wackos screaming at THEM instead of just screwing with the town halls.

[ncmom54]

Amen Sister! you are so right, it would shut them up fast. They understand Medicare, not afraid of it and since our states have high unemployment - even republicans would say 'why not?