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Sanjay Sanghoee Headshot

Health Care Endgame: Activate the Public Option

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By the time you read this, the Supreme Court might have ruled on the constitutionality of the Obama administration's health care law, but it doesn't matter. What is worth remembering here is that the law itself was watered down dramatically in order to win the support of the Republican party and the insurance companies. The president's original vision included the so-called "public option," which would have created a de-facto public insurance company to provide people with an alternative to private insurance. It was a great idea that was abandoned because of politics.

It was also the only idea which actually had a chance of changing the way health care works in America.

A lot has been written about the individual provisions of the law and I will not debate that here; I want to focus on the spirit and intention of the law. In the simplest terms, Obamacare was enacted to ensure that all Americans, regardless of their economic status, can get access to decent health care without going bankrupt in the process. In an era of skyrocketing health care costs, which includes the exorbitant charges of doctors, hospitals, medical device companies and, of course, the drug companies, average Americans are finding it harder to pay for care and, as a result, often avoiding treatment -- the long-term effects of which are going to be disastrous for the nation. Since the linchpin of this system is health insurance, that is where Obamacare focused most of its efforts, but that is also where it fell down.

The insurance business is simple. Maximum premiums, minimum payouts. In order for this to work, the insurance companies need pricing power, which they have plenty of in our oligopolistic system. A handful of large insurance carriers rule the day and are able to charge consumers whatever they want as premiums. Not only that, but on the coverage side, they march in lock-step to exclude as many conditions and treatments as they can get away with. In this type of raw capitalist hell, sick Americans are an afterthought.

The current health care law tries its best to rein in such opportunism, but the structure it uses to do that is flawed. The individual mandate requiring people to buy health insurance might have gotten insurers to agree to cover pre-existing conditions (amongst other things), but it will not stop them from increasing premiums or passing on costs to consumers in other ways. Anything that insurance companies accept from the government as incentive for good behavior will be offset by some other form of exploitation: for every pre-existing condition they cover, they will deny more claims elsewhere; for every new treatment they pay for, they will decrease the accepted industry scale for something else, making it impossible for hospitals and doctors to provide that service without suffering a loss. As long as Americans have to depend on private insurance companies for their health care needs, they will remain at their mercy.

The only surefire solution to this problem is the public option. Insurance companies may not care about the welfare of their customers but they do have to care about competition -- not the illusory competition that they pretend to have with their partners-in-crime peers but with the real, bare-knuckled competition they will face from a large public sector juggernaut.

Not only is the public fully entitled to set up its own business enterprise to provide a service to itself, but in doing so it would be espousing the finest principles of capitalism. A free market system is not compromised but enhanced by competition, including from the public sector. If the government of the United States can provide us with better pricing for health insurance because of collective bargaining power with health care providers, it is a democratic imperative for us to avail of that option. If private insurance companies can compete with the public option on price or service, more power to them; but if they cannot, then to hell with them.

I am willing to bet, however, that big insurance companies will not just fade away; instead they will streamline themselves to provide a better service at a more reasonable cost. It's the only way for them to survive, and even if the golden goose is more silver than gold, they will continue to nurture it. Smaller margins, after all, are better than none.

Of course, for any of this to happen, we must first have the public option. Regardless of which way the Supreme Court rules on the Patient Protection and Affordable Care Act, I think the White House should put this idea back into play.

President Obama's vision of universal health care will not die -- that much is assured. If it is wounded by judicial activism, it still has a chance to rise again, stronger and more pertinent, with a public option included. And if the High Court rules that Obamacare is constitutional, then the president should consider taking another brave stand in the fight to give Americans the health care they deserve. In this way, the sequel to Obamacare might just be better than the original.

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