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October 30, 2009

WaPo: Public plan mirage

Topics: Political News and commentaries

In his must-read column at the WaPo today, Robert Samuelson offers an informative look at what the "public plan" actually accomplishes and what it does not, and builds the case for it being mostly an exercise in political avoidance - pretending to control costs and improve access to quality care when it doesn't:

Here's a couple of excerpts:

[...] In the health-care debate, the "public plan" is all things to all people. For supporters, it would discipline greedy private insurers and make health-care coverage affordable. For detractors, it's a way station on the path to a single-payer insurance system of government-run health care. In reality, the public plan, also known as the public option, is mostly an exercise in political avoidance: It pretends to control costs and improve access to quality care when it doesn't.

As originally conceived by Yale political scientist Jacob Hacker, the public plan would be a government-created, nonprofit insurance company providing Medicare-like coverage to the under-65 population. But unlike Medicare, benefits would be paid for mainly by premiums -- not taxes. Americans could buy coverage from the public plan or a private insurer.

[...] The promise of the public plan is a mirage. Its political brilliance is to use free-market rhetoric (more "choice" and "competition") to expand government power. But why would a plan tied to Medicare control health spending, when Medicare hasn't? From 1970 to 2007, Medicare spending per beneficiary rose 9.2 percent annually compared to the 10.4 percent of private insurers -- and the small difference partly reflects cost shifting. Congress periodically improves Medicare benefits, and there's a limit to how much squeezing reimbursement rates can check costs. Doctors and hospitals already complain that low payments limit services or discourage physicians from taking Medicare patients.

Even Hacker concedes that without reimbursement rates close to Medicare's, the public plan would founder. If it had to "negotiate rates directly with providers" -- do what private insurers do -- the public plan could have "a very hard time" making inroads, he writes. Hacker opposes such weakened versions of the public plan.

Read it all here...

Related:
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Critical Condition: The Insanity of the House Bill

Posted by Richard at October 30, 2009 8:13 AM

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• WaPo: Public plan mirage - Oct 30, 2009