THE BLOG
09/27/2009 05:12 am ET | Updated May 25, 2011

If I Were President: How I Would Answer the Public Option Question

I can't shake the feeling that one moment in President Obama's August 15th Town Hall captures the lost opportunities of the whole summer.

From a front page story in the Los Angeles Times, August 16, 2009:

During an otherwise placid town hall meeting in Green Junction, CO, with 1,600 people packing a high school gymnasium, one University of Colorado student challenged Obama to an "Oxford-style debate" over the so-called public option.

"How in the world can a private corporation providing insurance compete with an entity that does not have to worry about making a profit, does not have to pay local property taxes," or face local regulations? Zach Lahn asked Obama. "How can a company compete with that?"

I was watching the town hall on television, and I offered encouragement, "This one's right down the middle. Don't foul it off." But soon I was yelling at the screen in frustration, as the President complimented the questioner on his chutzpah and then launched into a wonky defense of the public option, basically bragging that if you tied both hands behind its back, it might not offer such tough competition.

Here's how I would have answered:

"You're right it might be hard for private insurance to compete with public not-for-profit health insurance. But that's really not my #1 concern. My #1 concern is the health of Americans. When I leave office, I want the American people to be healthier.

"Too many may think it's unpatriotic to say the U.S. doesn't have the best health care in the world. But that's just a way to avoid facing the problem. The dictionary defines courage as 'the willingness to face and deal with things recognized as difficult, dangerous, or painful rather than withdraw from them.'

"We spend more than other nation per person and as a percentage of GDP on health and we don't get the results. We may have the best research hospitals, medical schools, doctors, and equipment, but we do not have the best health outcomes. If we've got the best but we're not achieving the best -- then the system is broken and we have to fix it.

"My administration will do everything we can to promote prevention and education and access to early care for all, but your health care will still be up to you. I aim to improve how we pay for it, and if giving more people Medicare-type health care does that, it's worth doing. And, for those who don't want government getting its hands on Medicare, I'll let you in on a secret: Medicare is government health care.

"Medicare has 4% overhead. That means 96 cents out of every dollar goes to your health. For-profit insurance naturally has higher overhead. In addition to making a profit, they have to market, advertise, and pay thousands of people to come up with ways to cancel your policy or not pay your medical bills. Medicare doesn't have to do that, neither will a public program.

"Think of the public option as giving everyone the choice to join Medicare no matter his or her age. The difference is, you'll pay premiums until you're 65. If we can cut costs -- then maybe we can lower that age. For now it's not going to be free, but your premiums are going to be lower than private insurance. Why? Because, like Medicare, a public plan doesn't have to make a profit, doesn't have to market. We'll do public education to let people know it's available, and make it easy for them to sign up. We'll commit to cutting fraud at every turn because every dollar lost to fraud is a dollar not helping Americans get healthier. In the public plan, we won't be paying anybody to make decisions that are better for their bottom line than for your health.

"So yes, if I were a private insurer and I looked at Medicare's overhead and my overhead, and I saw a difference of 15-20 cents per dollar, I'd be concerned how I was going to compete. But remember, my goal as President is not to save private insurance and it's not to eliminate it. It's to improve the health of Americans. You know whose job it is to figure out how to compete with a simple not-for-profit alternative -- it's the insurance companies'.

"Let's look at it two ways. If a public plan, that is, something like Medicare, ends up doing all the terrible things so many are screaming it will do, then only the most desperate will sign up, and the private insurers will continue to make their profits on everyone else.

"But if the public option isn't half bad, if it's as good as Medicare, then maybe they've got something to worry about. They'll have to show that for-profit insurance is worth the extra cost. They'll have to treat patients better than the public plan. They'll have to bring down premiums, so they'll have to reduce costs without sacrificing quality -- all because now people will have a choice.

"Let me return to the issue that I brought up at the top. All other advanced countries offer a public option, and they spend less and get better results. So it is up to for-profit insurance to prove that it's got a significant role to play in providing for the health of Americans in the future. If the public option serves some people who prefer it and drives for-profit insurance to improve, we all win. And remember, my first priority is the overall health of all Americans."

That's what I would have said, but, hey, I'm just a citizen.

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