Time to Kill the Pseudo-Public Option -- and Other Things to Tell Your Representative

The other day I wrote that the final Democratic bill was probably going to be worthy of support, however compromised it may be in certain ways. It should be understood that progressives won't get everything they want, or anything close to it, in the first go-round.

But, while it's wise to be realistic, there are two critical tests for reform: Is it an improvement over what we have today? And is it structured so that further improvements can be made as it becomes politically feasible to do so? There are significant problems with both the House and the Senate versions that could cause the final bill to fail one or both of these tests.

The biggest flaw lies in the House's failure to produce a robust public option -- that is, one that fully employs the administrative efficiencies and negotiating power of Medicare/Medicaid. A robust plan demonstrates and delivers the advantages of a public system, while bearing the disadvantages of such a system as well. (And there are disadvantages: For example, doctors could disenroll from the plan in large numbers if pricing is too aggressive.)

A robust public plan that's made available to all Americans on "a level playing field" could allow people to compare and contrast the advantages of public vs. private insurance, then make their own decisions. The House plan doesn't do that. As a result, my long-standing fear seems likely to come true. The plan will have low enrollment and little power to negotiate, causing the CBO to state as fact what I've long considered possible: That the public option could become a dumping ground where private plans jettison sicker people, while lacking the efficiencies of scale or negotiating power to get better rates or administer itself more economically.

As a result, says the CBO, a public plan's premiums might be higher than private insurance. While the CBO's word isn't gospel, it's entirely possible that they're underestimating the cost of any "public option" we're likely to see this year. The likeliest political outcome, once the House and Senate bills are combined, is a non-robust "public option" with a state-by-state opt out. The CBO didn't consider the opt-out when it came up with its shocking (to some) estimate.

So how small would the public option plan be in the end? The CBO projects an eventual 6 million enrollees. Compare that to UnitedHealth, which had 32,702,000 members in 2008. Or Wellpoint, with 30,622,000. Or Aetna, with 16,318,000.(1) The public option would barely make it into the list of top 10 US health insurers. And the opt-out provision could cut enrollment by another 20%(2) or more.

Remember: No other insurance companies will be told where and how they can compete -- only the "public option." How is that a "level playing field"? The end result is likely to be something called a public option, which is used primarily to placate progressives -- and which provides the political cover needed to force people to pay usurious private-insurance premiums. When this pseudo-public plan fails to deliver savings, reform opponents will use its failures as proof that public insurance doesn't work.

That would make the watered-down "public option" worse than no public option at all. One suggestion: Write or call your Representative and ask that they either restore the robust plan or ask the party to publicly admit its failure to deliver while shutting down this option altogether. And while you're on the phone, here are a few other things you might mention:

The Wyden "Free Choice" Amendment: The President and other Democrats told the American people they would provide "all Americans" with the choice of a public option. Instead, they've artificially restricted access to it (while leaving private insurers free to pursue everyone). The Wyden Amendment will deliver what the Democrats promised, and will lower overall health costs.

The Kucinich Amendment: The so-called Kucinich Amendment would have allowed states to opt out of the Federal system to create intrastate single-payer plans. It was approved by the Education and Labor Committee, but was stripped from the final House bill. The end result? The Senate says states can "opt out" of the public option, but the House says they can't opt out of the private system. That doesn't seem right.

Tolerable premiums and out-of-pocket costs: It's hard to ask a family of four living on $88,000 to pay 12% of its income in premiums, yet still face $1,500-per-person copays and total possible costs of $10,000 per year. (That's better than the Senate version, however.) These provisions have to be made less onerous for working families. Health analysts used to employ a guideline that said 12% of family income should be the total expense for healthcare, or the "ceiling" on possible health costs, not - as this bill would have it - the floor or minimum cost.

No dumping or foul play: Many of the insurance industry's bad behaviors are banned by the House bill (which, complaints aside, has many good features.) But there need to be stronger protections against subtle abuses designed to drive sick people out of private plans. These abuses might include planned provider shortages in needed specialties (e.g. oncology, high-risk neonatology), delays in claims payment, and obstructionist use of prior authorization program.

Make drug costs manageable: Jane Hamsher describes the perils faced by breast cancer patients, and those with other conditions that require expensive patented drugs. Many of Jane's concerns will be addressed by the bill's caps on out-of-pocket costs, and by the elimination of lifetime maximums. But more should be done to ensure that drugs are made generic as quickly as possible, and to restrict the insurance industry practice of labeling them "experimental" and refusing to cover them.

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(1)The large plans have been losing membership over the last two quarters as employees are laid off during the downturn and become ineligible under group health plans. They would be likely to gain these enrollees back under reform, however, through the insurance exchanges.

(2)Many of my friends and colleagues still say most states wouldn't dare opt-out and face the public's wrath. I still say they're dreaming -- especially after that CBO report. A candidate for Governor in Virginia already said he's leaning toward opting out - and he was the Democrat.

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RJ Eskow blogs when he can at:

A Night Light
The Sentinel Effect: Healthcare Blog

Website: Eskow and Associates

 

Follow RJ Eskow on Twitter: www.twitter.com/rjeskow

Comments

[Indon]

Honestly, if I can use it, then I'm okay with it.

What would the point be of having private health insurance that won't actually insure me, even if it is a bit cheaper? It would, even, be worse than buying nothing - it would be giving money to criminals for nothing.

If a working public option passes, we don't even necessarily need legislation to improve it - we can just all enroll in it, and allow the free market to do its' thing by driving all the corrupt nonbusinesses in the industry bankrupt. Then there'll be support for improving it.

I'm perfectly happy with paying a premium to get working health insurance. I'm worried only about not being able to get working health insurance.

[Guitarsandmore]

We've talked about health care CEOs getting rich off of denying coverage but the other side of the coin is just as bad if not worse. And that is that some hospitals and health care corporations have had to close their doors because they are not making enough money to cover the costs. Then patients have nowhere to go when they are sick....

This whole focus on money, money, money, is wrong, wrong, wrong.

When my doctor comes to work on me I want that doctor thinking about only one thing, "how can I help this patient get better"?

I don't want them thinking about getting rich and I don't want them worrying that there is not enough money to cover the costs of what I need.

And somehow the government has decided that it is OK to funnel tax dollars over to that giant gambling casino called WALL STREET so tthat a few can have their fun and a few get rich. But there are lots of questions when it comes to funding health care for all. What questions? How can anyone juxtapose the giant WALL STREET casino and health care and then come away with any other conclusion than the people are much better served by funding health care for all...............

[Guitarsandmore]

I don't really care if the public option does become the dumping ground for tough medical cases. I can't think of a better use of tax dollars than caring for the sick. We have certainly wasted tax dollars on less worthy causes.

Lieberman may be starting to cave say some reports and I know I have sent him my own nasty grams. We need to keep clobbering Senators and congressmen until we get the single payer universal health care system we really deserve and should have.

Corporations running doctors and nurses around has always been a bad idea and it needs to stop. CEOs and executives have no "value added" for the health care system and we should send them all packing. The doctors and nurses have value to the patient and we can do without all of the overhead, advertising, profit, high salaries for the administrators, and coverage denial departments.....

[olderdem]

RJ, you state:

"That the public option could become a dumping ground where private plans jettison sicker people, while lacking the efficiencies of scale or negotiating power to get better rates or administer itself more economically."

I've heard this, but don't understand. Don't other provisions in the "reform" require that insurance companies to insure any and everyone, despite pre-existing conditions? And won't they be prohibited from "dumping" anyone?

So how is your scenario possible? In fact won't private health insurance companies raise rates precisely because they will be required to cover a sicker group of clients?

Please explain.

[mcartri]

Anyone who has actually tried to use their health insurance knows that the insurance companies are in business to deny their benefits(It's called profit). This hoax of health care reform is a total sell-out to Big Pharma, private insurers & for profit hospitals, enabled by a corporate owmed President & Legislature. Without both the Wyden & Kucinich amendments in the final bill, I would vote NO, but then I'm not corporate owned. Time for a new third party that represents Main Street. That could be its name: The Main Street Party.

[RJ Eskow - Huffpost Blogger]

See above: "...there need to be stronger protections against subtle abuses designed to drive sick people out of private plans. These abuses might include planned provider shortages in needed specialties (e.g. oncology, high-risk neonatology), delays in claims payment, and obstructionist use of prior authorization programs."

[rssrai]

As long as the bill has a PO, not a PO with triggers, the bill can be built on. The democrats better pass a bill before Christmas or they are in trouble.

[gordonla]

The Federal system is incapable of producing a bill that will reduce health care costs:
1. The method of passing bills involves guarantees to special interest lobbyists. That's why the bill is 2,000 pages.
2. Many of the bureaucrats that will regulate this will be non-medical persons that will want to get paid for their supervisory work.
3. The larger and more impersonal the bureaucracy that funds anything, the easier it is to defraud.medicare is losing billions of dollars because the federal government is so easy to defraud. It would be much more difficult to defraud lower levels of government, where people can watch it in person.
4. It is our inherent desire to let someone else pay for our health care that leads to this legislation, but in the end it is a ponzi scheme, it is just irresponsible behavior.

[ouroborous]

"4. It is our inherent desire to let someone else pay for our health care that leads to this legislation, but in the end it is a ponzi scheme, it is just irresponsible behavior."

No, it's called shared risk. This is a particularly pernicious lie from the conservatives and libertarians; the idea that people who want health insurance reform are just trying to scam the system and get something for nothing.

On the contrary, what's driving health insurance reform advocates is the knowledge that a) the current system is *broken*, except for a very few lucky folks at the top, and b) part of the reason that it's broken is our peculiarly American flavor of capitalist medicine -- the only system in the world that basically says "if you ain't got enough money, tough luck buddy -- you're going to die."

The solution is essentially a variation on the idea that "many hands make light work;" if we're all thrown out to sea individually, we'll likely drown. If, on the other hands, we work together and build a raft, we might just make it out alive. Conservatives and libertarians conveniently ignore the multiplicative power of pooled resources and act as though every tax dollar spent, every social program enacted, is a mortal sin.

[ephemeral eternity]

Strategy is as important as substance.

Several small bills would have been a better strategy.

The first bill could have merely stated that insurance companies can only charge one price for their plans, irregardless of age, health or anything else.

One page and half the problem is solved.

The other issues could have been dealt with in a similar fashion.

Small simple bills are much harder to demagogue. You would have thought that this was apparent from the last attempt.

[TheMediaRanger]

The most effective thing that people can do is try to stay informed on the issues and keep pounding their reps in Congress and the Senate with phone calls and letters. The Senate, for one, will need to open the bill up to amendment for me to consider it remotely acceptable and, indeed, not harmful. The Physicians for a National Health Program web site is the best I've found for resources, links, address & telephone directories for representatives, talking points, suggested letters, etc.

http://www.pnhp.org/amendment/

[time4change2009]

Article by Greg Jones:

" Congressional Health Care Plan
Could Be DISASTROUS For the 46 Million Uninsured !"

Click to read: http://blacks4barack.blogspot.com/2009/11/congressional-health-care-plan-could-be.html

Call...Dem­and...FIGH­T !
STRONG Public Option ONLY !

[mcartri]

Thank you,Time4c­hange2009, for the connect to the Greg Jones article. For those who did not click on it, please do. It's fair & informative.

[tran23]

Interesting article. I was under the impression, before reading this article, that tax credits were to be offered to those that were just above the Medicaid income level. I've never heard anybody give any specifics about the tax credits/incentives though. Maybe I was wrong?

[Papa Swamp]

There are no cost controls in the bill. No elimination of anti-trust, no across state lines options, no tort reform...there are increase in taxes (soaking the only group left with any disposable income seems a bit ignorant), increasing costs of medical devices through taxes (how exactly does this lower medical costs?!), decrease payments to Doctors and hospitals, increase costs to drug makers (they will just pass it on or cut R&D...brilliant!), take from a program (Medicare) that is already disastrously in the red and getting worse (read the GAO fall 2009 fiscal report....has noone read this?!)
http://www.gao.gov/new.items/d10137sp.pdf

[DrInsula]

Er, what? Tort reform is not a cost control. Estimated savings from tort reform, in states that have, is about 0.1%....

[JavaManiac]

I think I will move myself - my family - and my business to Canada!

[Indon]

Watch out, you'll have to pay actual taxes.

Of course, you'll get working healthcare.

[Norm]

The White House and Democrats seem to feel that Progressives will back them in the next election because of lack of options. We need to let them know, all of them, that they are dead wrong. I voted for Obama because he seemed to understand that poor and middle income people don't have insurance not because they don't want it but because they can't pay for it. He promised in debates that he would provide a plan where everyone would have insurance as good as that of congress. We need to hold him to that.. I have let my representatives know that if they vote for the current bills put forth and/or do not opt for public plan themselves, I will not vote for them in the next election. I was so aggravated early in the last election I almost cast a third party protest vote. Next time they can count on it. The public option as proposed is laughable.

[Doofus]

Admittedly I'm not a Progressive. Rather I'm a centrist who would happen to prefer
'single payer' health care, BUT the US is just not ready for it, politically. Instead, we
have to insist on this 'public option' variation. It needs to include an effective wind-
fall profits tax on insurers, and it needs to place them under anti-trust regulation.
And do the other things: end pre-existing conditions, provide affordable coverage
for all, guarantee no one goes bankrupt from medical bills. If it doesn't do this, it
isn't worth supporting. So, the political problem is not just losing the support of
Progressives, it's losing centrists who are all too ready to become 'fed up' also.

[suz1941]

Whatever happened to the people having a health care plan like their senators and representatives? Was that just campaign rhetoric, from both parties? Apparently so. If it were not so, then our senators and representatives would already have a model in place to work from. From what I am reading and trying to understand, any bill will come away looking like politics as usual with as many loopholes as a ride at a carnival.

Logic and some common sense doesn't play a role in this circus. Everyone in DC has their own agenda and their constiuents are secondary - if that rank that high! Until something is done about Campaign Finance Reform, making insurance industries and pharma impotent, the people will get a watered down version, down the road enacted, health care plan.

[Raster]

What happened to the Congressional Progressive Caucus' promise to vote AGAINST any final bill that does not have a robust public plan option? HP ran numerous columns about thei "resolve" but now I can't find hide nor hair of them?

[creolechild]

From the looks of things, the Congressional Progressive Caucus is caving...if we don't encourage them to stick to their promise. We need everyone's help on this issue to get it done right: single-payer advocates, Medicare For All advocates, and those who support the public option. Please take a few minutes to email or call the Congressional Progressive Caucus today and let our voices be heard, in unison, for a strong public option that includes the Wyden, Weiner and Kucinich amendments. Contact information for the CPC can be found by clicking on the following link: http://cpc.grijalva.house.gov/index.cfm?SectionID=4&ParentID=0&SectionTypeID=2&SectionTree=4

And by the way, Bernie Sanders still has some skin in the game:
"Parallel actions will soon be taken in the US Senate: Senator B. Sanders (I-VT) has stated his intention to introduce single payer amendments once the health care bill comes to the Senate floor – for his own national single payer bill, and for a provision in the final health care bill that would allow states to implement single payer systems. Consider sending an email to Senate Majority Leader Harry Reid: http://reid.senate.gov/contact/index.cfm

The full article can be read by clicking on the following link: http://www.workerscenter.org/node/156

Peace.