Health Reform and the "Public Option"

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The debate on health care reform, at least in the inner circles of Washington and the punditocracy, has shifted to whether there will be a “public option” as President Obama has asked for. (e.g., “Obama to forge a greater role on health care”, New York Times, June 7, 2009 http://www.nytimes.com/2009/06/07/us/politics/07policy.html?scp=1&sq=obama%20to%20forge%20a%20greater%20role%20on%20health%20care&st=cse and “Obama urges doctors to back his health plan” NYT June 15, 2009 http://www.nytimes.com/aponline/2009/06/15/us/politics/AP-US-Obama-Doctors.html?_r=1.) The discussion is about whether a public option would be “unfair”; actual human beings who wish you to believe that they are both caring and balanced, such as NY Times columnist David Brooks (on NPR, June 12, 2009) say that the danger is that public option will be subsidized, and thus “unfair” to the private insurers. This is, of course, obvious and bald nonsense. What does “subsidized” mean? If it is a public option, it is being funded with public funds, and thus could be described as “subsidized”. Opposition to “subsidy” means simple opposition to a public option. Why on earth should a program be fair to private insurance companies seeking to make a profit? I suspect that the real fear is that any public option would soon become so much more desirable than the offerings of private companies, which exist solely to make money and thus have to either raise premiums or cut benefits, that very few people – primarily the very wealthy who want boutique services – would choose the private options.

In the New England Journal of Medicine June 4, 2009, John Iglehart notes the speakers against a public-plan option http://content.nejm.org/cgi/content/full/360/23/2385. They included representatives of the Heritage Foundation, the Business Roundtable, the National Federation of Independent Business, the US Chamber of Commerce, and the Blue Cross/Blue Shield Association. I think that the business group opposition may be ideological, but the insurers are another story:

“Karen Ignagni, chief executive officer of America's Health Insurance Plans, also expressed strong opposition to a public insurance plan, arguing that a better approach would be a "fundamental" overhaul of government regulation of the insurance marketplace and correction of other shortcomings of private coverage — reforms that are acceptable to her organization as long as all people are required to have coverage.” That is, pay the insurance companies money to maintain their profit.

This is not to say that the national debate has devolved to that level; single payer, a universal health care system, remains, as this blog has described, the only proposal with a mass movement of actual people behind it, including consumer groups, labor unions, and church groups. They have not been silent; they have inundated members of Congress with letters, faxes, emails, and phone calls. So far these have fallen upon deaf ears. We have previously discussed the assiduous effort of Senator Baucus to ignore these voices. The most recent federal official to be caught with fingers firmly in his ears is Representative Charles Rangel, Chairman of the House Ways and Means Committee. Rangel, a Manhattan Democrat representing Harlem and the Upper West Side, has long been a progressive voice in Congress, and it is quite reasonable for single-payer advocates to have expected a more positive reception from his office than they received from that of the senator from Montana. Yet a recent fax campaign from the single-payer advocate organization Health Justice (www.health-justice.org, not associated with this blog, Medicine and Social Justice) was met, incredibly, with an incredibly hostile reception from his office, at least that in NYC. Phone calls were often not answered, not returned, and amazingly, faxes, in an indescribably juvenile response, were faxed back to the senders! This is all the more amazing in that many of those faxing were Rep. Rangel’s own constituents. Apparently, after a conversation with Rep. John Conyers of Michigan, like Rangel a senior member of the Congressional Black Caucus as well as the primary sponsor of HR 676, the main single-payer bill in Congress today, Rangel’s office (at least his DC office) became more responsive; at least the phones are being answered and the faxes are not being returned. In a dramatic style difference, Rep. Conyers himself was available to talk on the phone at length with leaders of Health Justice.

What is it with them? Why are such moderate (like Senator Baucus) and even liberal (like Representative Rangel, Senator Kennedy, and Senator Dodd) so dead set on ignoring a huge public constituency? For some, it is the direct influence of the insurance lobby, and the huge amount of money that the industry has to influence lawmakers (and the public; remember Harry and Louise) and stands to lose if single payer passes. For others, it is simply groupthink; they believe that so many others are convinced by the power of the insurance companies that single-payer could not pass. But who knows what would happen if they all stood together?

One issue raised by opponents of both single payer and a public plan is the cost of covering everyone. (NYT editorial, “Paying for Universal Health Coverage”, June 7, 2009, http://www.nytimes.com/2009/06/07/opinion/07sun1.html). This is, of course, the actual opposite of what would happen with a single payer system. This emperor has no clothes. The most costly plan would be to cover everyone by mandating insurance and paying the insurance companies their going rates; of course, this, the most expensive possible option, is what the insurance industry is asking for. Funding for a single payer system starts with Medicare, which already covers our highest-cost citizens, the elderly and disabled, and folds in state and federal funds for Medicaid, the amount employers and employees pay for health insurance, and the tax dollars currently being lost through the tax exemption for health insurance contributions. The value of these dollars is enhanced through elimination of the profit being made by insurance companies. It is amazing to me that insurance companies can successfully raise the specter of government bureaucracy as an objection to a public plan – has anyone tried to get service from their insurance company recently? Is there a more cold, unrelenting, and obstructive bureaucracy?

Let me reiterate that last: ELIMINATION OF THE PROFIT NOW BEING MADE BY INSURANCE COMPANIES. ELIMINATION OF THE PROFIT NOW BEING MADE BY INSURANCE COMPANIES! Say it loud and say it proud; there is no reason the American people need to support a plan that continues, indeed builds in as its cornerstone, the profit of insurance companies. Say it often, say it to your Congressmen. We do not care about the insurance companies. Ignore them; work for the American people. The insurance industry saying “we should not dismantle the system we have” is nonsense; they are saying “let’s try to keep us making as much money as possible. To the extent that their plans call for health care dollars to go not to providing health care but providing profit, they are the enemies of the American people.
If insurance companies wanted to participate in a productive way, they should become non-profit, as they are in many other countries, and compete on the basis of quality and service. As Paul Krugman noted on June 5, 2009 in his column, (http://www.nytimes.com/2009/06/05/opinion/05krugman.html):
“Let me offer Congress two pieces of advice:
1. Don’t trust the insurance industry.
2. Don’t trust the insurance industry.”

The real concern is not that there will be a public option that will be subsidized, but rather that there will be a private “option” that will be subsidized either by having no public option to compete with it or by being protected from meaningful competition by a public option through the latter being hamstrung with all sorts of restrictions.
If the insurance companies or their supporters really thought that the product that they offer or could offer was better, cheaper, higher quality, more efficient or more effective, they would welcome the competition. The fact that they are so adamantly opposing it means that they know that they would be completely swamped by a well-designed public program.