Democrats ditch public option? :: Political News and commentaries

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December 9, 2009

Democrats ditch public option?

Well, sorta kinda, more or less:

WASHINGTON -- After days of secret talks, Senate Democrats tentatively agreed last night to drop a full-blown government-run insurance option from sweeping health-care legislation -- a concession to party moderates whose votes are critical to passage of President Obama's top domestic priority.

In its place, officials said, Democrats had settled on a private insurance arrangement to be supervised by the federal agency that oversees the system through which lawmakers purchase coverage, with the possibility of greater government involvement, if needed, to ensure consumers enough choices.

Additionally, the agreement calls for Medicare to be opened to uninsured Americans beginning at age 55. The program currently serves the 65-and-over population.

At a hastily called evening news conference in the Capitol, Majority Leader Harry Reid (D-Nev.) declined to provide details of what he described as a "broad agreement" between liberals and moderates on an issue that has plagued Democrats' efforts to pass health-care legislation from the outset.

With it, he added with a smile, the end is in sight for passage of a bill Congress has labored over for months.

At its core, the legislation, now minus the so-called public option, would expand health care to millions who lack it, ban insurance companies from denying coverage on the basis of pre-existing medical conditions, and rein in health-care spending nationally.

Michael D. Tanner notes that this is yet another truly bad idea and that Harry Reid has good reasons to keep the details secret:

In choosing the FEHBP for a model, Democrats have actually chosen an insurance plan whose costs are rising faster than average. FEHBP premiums are expected to rise 7.9 percent this year and 8.8 percent in 2010. By comparison, the Congressional Budget Office predicts that on average, premiums will increase by 5.5 to 6.2 percent annually over the next few years. In fact, FEHBP premiums are rising so fast that nearly 100,000 federal employees have opted out of the program.

FEHBP members are also finding their choices cut back. Next year, 32 insurance plans will either drop out of the program or reduce their participation. Some 61,000 workers will lose their current coverage.

But former OPM director Linda Springer doubts that the agency has the "capacity, the staff, or the mission," to be able to manage the new program. Taking on management of the new program could overburden OPM. "Ultimate, it would break the system."

Medicare is currently $50-100 trillion in debt, depending on which accounting measure you use. Allowing younger workers to join the program is the equivalent of crowding a few more passengers onto the Titanic.

At the same time, Medicare under reimburses physicians, especially in rural areas. Expanding Medicare enrollment will both threaten the continued viability of rural hospitals and other providers, and also result in increased cost-shifting, driving up premiums for private insurance.

Medicaid is equally a budget-buster. The program now costs more than $330 billion per year, a cost that grew at a rate of roughly 10.7 percent annually. The program spends money by the bushel, yet under-reimburses providers even worse than Medicare.

Ultimately this so-called compromise would expand government health care programs and further squeeze private insurance, resulting in increased costs, result in higher insurance premiums, and provide a lower-quality of care.

As Americans will quickly find out, the real devil is in the details, and the "possibility of greater government involvement, if needed" is nothing less than a trap door for government-run healthcare and eventually a single payer system. Also, common sense tells us that the Democrats' plan virtually assures Americans that their healthcare will be rationed since it is impossible to cover millions more Americans with fewer dollars and the same number - or fewer, doctors.

Related:
Hair-of-the-dog entitlement reform? (The latest trial balloon floated out of the Senate on a potential compromise for ObamaCare would vastly expand the entitlement program heading most quickly towards insolvency)
Any Deal
The New Public Option, Same As the Old Public Option...Trojan for Single Payer
Senator Reid's Vapor Deal