No Public Option, No Deal
President Obama's health care reform plan as described in the budget outline includes eight principles, designed to guide lawmakers as they fill in the details of the plan. Here they are:
• Guarantee Choice. The plan should provide Americans a choice of health plans and physicians. People will be allowed to keep their own doctor and their employer-based health plan.
• Make Health Coverage Affordable. The plan must reduce waste and fraud, high administrative costs, unnecessary tests and services, and other inefficiencies that drive up costs with no added health benefits.
• Protect Families’ Financial Health. The plan must reduce the growing premiums and other costs American citizens and businesses pay for health care. People must be protected from bankruptcy due to catastrophic illness.
• Invest in Prevention and Wellness. The plan must invest in public health measures proven to reduce cost drivers in our system—such as obesity, sedentary lifestyles, and smoking—as well as guarantee access to proven preventive treatments.
• Provide Portability of Coverage. People should not be locked into their job just to secure health coverage, and no American should be denied coverage because of preexisting conditions.
• Aim for Universality. The plan must put the United States on a clear path to cover all Americans.
• Improve Patient Safety and Quality Care. The plan must ensure the implementation of proven patient safety measures and provide incentives for changes in the delivery system to reduce unnecessary variability in patient care. It must support the widespread use of health information technology with rigorous privacy protections and the development of data on the effectiveness of medical interventions to improve the quality of care delivered.
• Maintain Long-Term Fiscal Sustainability. The plan must pay for itself by reducing the level of cost growth, improving productivity, and dedicating additional sources of revenue.
In my opinion, this is a blueprint for what can pass Congress, not a blueprint for a plan that can best serve the people. It preserves choice - and essentially the current system - because 85% of Americans already have a health care plan, and the Clinton plan in the 1990s was partially sunk by repeated attacks on how it "takes away your health care." The rest of it is fairly clean. Obama wants to make health insurance affordable to every American, and he'll do that through subsidies and an individual mandate, while controlling costs through prevention, health IT, comparative effectiveness, etc., to make the plan better for the 85% who have coverage, too. He's also giving incentives to lower Medicare spending by region through higher payments for patients who don't have repeat visits and phasing out Medicare Advantage, which sought to privatize Medicare through the back door at more cost to the government. But there's one huge element missing - a public option to compete with private insurance, which in my view would bring down premiums as insurers would have to compete on price and quality.
These principles call for universality, but not for a public option. That seems pretty backwards to me. The mandate should in theory be popular with insurance companies (in fact, it should be non-negotiable for them) and it ought to be used as a bargaining chip so that they can't just put all their efforts into fighting other truly progressive measures like the public option. Handing over the mandate gift at the outset and then hoping they agree to a public option down the line, or after the legislation's been introduced makes things much, much harder.
On this very point, Howard Dean said, "If they are allowed to choose Medicare as an option, this bill will be real health care reform. If they’re not, we will be back fighting about it for another 20 years before somebody tries again. "
This seems to be more of that bad bargaining. The Obama team may have convinced themselves that the public option would be a poison pill for getting conservative support, so they dropped it at the start. But we'll never know, because it's gone, and can't be used as a bargaining chip. Of course, Congress could revive the public option, as these are merely principles which are not exclusive.
Obviously single payer advocates are frustrated because this proposal isn't single payer, but I think they should be concerned with the lack of a public option even more, because that was the way for this to evolve into something like a single payer or an 80/15/5 (80% public, 15% private, 5% hybrid) system. There are additional pitfalls with an individual mandate if it does not include guaranteed issue and community rating, but the lack of a public option is a dealbreaker for me.
In other words, for Obama's plan to work it must have individual mandates and a public insurance option open to everyone and insurance companies must be forced to compete on even ground with the public plan - same cost schedule and the same underwriting (basically none).
Likewise individual mandates that don't have high enough subsidies leave large numbers of people uninsured anyway because they can't afford the insurance. If it's a choice of eating, paying rent or paying for insurance, people will take their chances on getting sick or live with their existing health care problems. This is what has happened in Massachusetts, which has a supposedly universal system which actually isn't, because subsidies aren't sufficient [...]
Obama has said he's leaving the details to be thrashed out by Congress, having learned from Clinton's failure. But the details will determine whether it's a plan which will simply help Medicare and Medicaid recipients and raise costs for everyone else; whether it's a repeat of the Massachusetts experiment, whether it really contains costs not just for the government but for everyone; or if he is successful in really giving true universal healthcare where everyone gets the healthcare they need when they need it.
The short version is that an individual mandate can work, but must have a lot of elements that the plan so far neglects to emphasize.