Public Option
Posted by Steve Piontek, Editor-in-Chief in companies, health care reform, opinionIf you’re a driver, then it’s likely that the only time you pay attention to speed limit signs is when you spot a cop car parked on the side of the road or when (even more inconveniently) the cop is on the road doing the speed limit and no one dares go faster, meaning you have to go that slow until the cop gets on an exit ramp and out of the way. Then, as if all the drivers were a bunch of lemmings, everyone picks up the speed they were going before or maybe even faster to make up for lost time.
Speed limit signs, in other words, are pretty ineffective at controlling drivers and are treated by most of them as mere suggestions.
This insight, I believe, is what is behind the administration’s and other Democrats’ insistence that any health care reform needs to include the so-called “public option” as a way of making sure health insurers obey the speed limit, as it were.
The health insurance industry’s reaction has been unenthusiastic, needless to say.
Here’s what a spokesman for AHIP said in response to the one Democratic package unveiled recently: “A government-run plan would dismantle employer-based coverage, add additional liabilities to the federal budget, and turn back the clock on efforts to improve the quality and safety of patient care. A better approach is to pursue reforms that can achieve broad bipartisan support, including strengthening the health care safety net, overhauling existing market rules, promoting shared responsibility, and transforming the delivery system to reward quality and value.”
Now, who could possibly disagree with those noble goals? But the devil, as they say, is in the details or, in this case, how to get from the present unsatisfactory point A to a point B where the health care system works for everyone.
The reality of the situation is that you’re not going to do it without the cop.
Any idea that’s put forth that would dramatically change the status quo is jumped on by Republicans as leading to a government-run health system.
Public option? Socialism!
A tax on rich health benefits? Socialism!
Individuals being required to have health insurance? Socialism!
This last really gets me because the people spouting this nonsense don’t believe health care is a right but they don’t want to make it a responsibility either.
So much for the “broad bipartisan support” so nobly wished for by the AHIP spokesman.
The reality is that something major in the current way we insure people is going to have to change in order for the system to get better. Tweaks are not going to do it.
President Obama made a telling point about the public option in his press conference on June 23. “If private insurers say that the marketplace provides the best quality health care, if they tell us they’re offering a good deal, then why is it that the government-which they say can’t run anything-suddenly is going to put them out of business? That’s not logical.”
Shortly before Mr. Obama’s press conference, Karen Ignagni, president of AHIP, and Scott Serota, president of the Blues, wrote a letter to the Senate that said, “We do not believe that is it possible to create a government plan that could operate on a level playing field. Regardless of how it is initially structured, a government plan would use its built-in advantages to take over the health insurance market.”
This is pretty lame and the industry really should be able to articulate its case backed by evidence instead of simply resorting to jejune arguments.
The fact is that when the cop is on the road, everyone else is on their best behavior. And if they’re not, they should be ready to get pulled over.
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Profits Profits Profits – This dirty word is exactly what has powered our country to amazing heights. Profits and capitolism are a good thing, they’ve helped to create advances in better products & services, etc. Insurance companies are a business and are required to make a profit. On the other hand in this discussion, the government does not have to worry about profits; just look at other programs it has run and they continue to be funded and fail. They also can write their own laws as we’ve seen over and over. There is a very big difference and there’s not a level playing field. We better learn from history and not buy into all this montra that the current system is so bad. When the market place is allowed to function is responds and adjusts to the needs of the consumer. It’s not perfect but it has shown to be flexible and adjust when allowed. Think back as to where we all started in this industry. We should not be allowed to be bullied by our elected officials and the administration. There is much more good in the current system than is being portrayed.
I have been reading your publication for quite some time. You have irritated me a lot by your open support of Barrack Obama during the presidential election campaign. Now your recent piece really makes it clear to me that you are nothing more than a liberal journalist who doesn’t know anything about the insurance business!
I have been in this business for 45 years and I can tell you this – we do not need healthcare reform from the government nor do we need a government cop. We do not need anything that this current government is trying to force upon us. What we do need is smaller government, lower taxes, strong military and, a different president!!
Put that in your liberal pipe and smoke it!
As a health insurance broker who receives your publication, I was a little surprised that an editor of an insurance publication would publish an editiorial that will likely produce visceral disagreement with 90%-plus of the magazine’s readers.
First, I respect your right to express your opinion, and, second, I admire your “cojones” if you understood that most of your readers would disagree, and still published the editorial. You can count me as one who disagrees with your opinion that a “public option,” in the form that was recently released in the House draft bill, would be good for our health care system. Your editorial expressed the opinion that a public option would act as a “cop” to keep the insurance companies honest. However, if we actually pass a bill that includes a public option as outlined in the House draft, it would create an unfairly tilted playing field. The public plan would be “allowed” to pay doctors and hospitals more than Medicare reimbursement rates, but would not be forced to. Medical providers that accept Medicare would also be forced to accept patients covered by the public plan. The public plan would also be eligible for periodic government bail-outs, per the language in the draft, if it encountered financial difficulties.
Compare this to a private health insurance plan. The insurance company enters into often delicate negotiations with medical providers as to what reimbursements will be from their plans of insurance. The private carrier must be competitive with other insurers, or medical providers simply opt out of that insurer’s network. No medical provider an be forced to accept that insurer’s customers as patients. No private insurer is eligible for bail-outs by the Feds if they do not run their business in a financially responsible way.
Even if the public plan starts out paying market rates to doctors, their is much concern that this would change over time. Medicare and Medicaid began in 1965 paying prevailing fees to medical providers…..now Medicare pays around 75% and Medicaid around 60% of the actual cost of treating their insureds. The balance of this cost is shifted to patients paying for private health insurance. It is estimated that the average family coverage premium for private health insurance is inflated by $1,755 annually to pay for this cost shift from underpaying public health insurance. Bottom line, if a public plan is created that is run and funded by the government, there is a really good chance that it would run private insurers out of the health market, and as result give us a single-payor system over time, with an underfunded system, rationing, waiting times for treatment, lower salaries for doctors, rationing, etc., that are the hallmarks of every other single-payor system in the western world. This may appeal to you personally, but does not to virtually all of your readers and most of the American public.
You know, I don’t know if you are just woefully underinformed on this issue or are just expressing your own political leanings. If it is the former, my hope is that you study the “devil is in the details” before you write another editorial. If it is the latter, you have a right to express your opinion. But it is sort of like writing an anti-business editorial in the Wall Street Journal….it seems out of place and is subject to return fire from most of your readers.
You make some great points and I applaud you for not just pandering to the audience. Telling the readers of National Underwriter – the supposed 90% – just what they want to hear would not serve any purpose and would indeed be a disservice. The debate over Health Care reform encompasses the whole nation and not just those that sell health insurance. Some may find comfort in hearing their views echoed back, but those interested in hearing both sides of this critical issue should welcome your comments. Your article provides a good analogy and I applaud and agree with you – which must put me in the 10%.
You have said what must be said.
That takes courage. Congratulations.
I believe that more insurance agents feel that you are correct, but lack the guts to say so, or fear retribution (cancellation of contracts) if we disagree when our MGAs and carriers PR departments continue to bombard us with the “socialist” thing.
The U.S. health system is deteriorating – I don’t see how anyone can put a bow on it. Year after year, a growing number of the population becomes more and more dissatisfied with either 1. Paying more for it, or 2. Being let down by it. Sure, lower taxes and less regulation are staples of success when it comes to economic growth, greater profits, and greater innovation. Some might argue that we have and are achieving great heights in healthcare innovation, but people still cannot afford basic services. I can’t help but think that healthcare – regardless of how technologically advanced we “think” we are in it, is somewhat different than a company that sells me toilet paper, gold watches, or the airplane I hitch a ride on. There are distinct fundamental differences between this industry and most – it is already fully infiltrated by the government, it is relied on by so many. It is becoming more and more evident that the costs to fix it are sunk whether we spend it now or later. I get sick and tired of the stubborn and arrogant debate participants who would rather sit on their duffs and rant and rave at the same time, than accept “one” solution that will help the industry EVOLVE to where it needs to go. People can rant and rave all they want about how the steps being taken are costly, inefficient, and discriminate against the diligent taxpayers who work hard (or have just been blessed “luckily”), but there’s another school of us that want action, and let’s pick up the pieces later. This debate reminds me somewhat of McCarthy and anti-communism. How stupid does that time period – and those people who supported McCarthy look now?
Bravo. If the health insurance companies were doing such a great job, then this debate would not be happening. I believe that the core of the problem remains in the concept of employer-based health insurance and a system which does a poor job of actual risk-pooling in order to spread cost. If large insurers actually risk-pooled all insureds from large groups, small groups, and individual policyholders, then it seems that we could all benefit from the concept of insurance as a pooled-risk. Anyone who has bought either small group insurance for their employees, or who have purchased an individual policy (and had any current condition pre-exed), is well-aware that actual risk-pooling is not happening (I have to think that it is less profitable). On that note, I am not against profit – I am against manipulated profit.
The anti-public option voices love to warn to the effect that “you don’t want a government beauracrat determining your health care”; why not, currently we have health insurance beauracrats determining it, difficulty to get a non-emergency appointment, long waiting times due to triple-booking by providers in order to maximize their insurance contract, etc.
I am convinced that what we (end employers) pay for private health insurance, if instead paid as some form of tax, would not increase our individual net cost but would provide universal coverage, which in turn would be far better overall for our country as a decent place and for our economy and businesses.
The NU bills itself as “…Trusted leader in news and expertise for Insurance…” After reading your editorial piece “Public Option” in the 7/6/09 NU Life & Health, I’m seriously considering cancelling my decades-old subscription. If you’d done just a little bit of homework, you’d understand that the industry just wants a government-run health plan to to have to play by the same rules that the industry has to; you know, actuarially sound rating & reserving, paying premium taxes, negotiating reimbursement levels with healthcare providers, benefit design/mandated state requirements, etc.
It is not at all far-fetched to assume that the government-run plan would employ many of the same tactics it uses in it’s other government-run health plan, Medicare; again, you know, mandating to providers what they will pay for services & threatening to sue them for fraud and get their license if they charge more (even when the amount they pay doesn’t even cover the cost of services provided), raising rates -er, taxes, anytime there is a funding shortfall (see Medicare track record here), and the government surely is not going to pay premium taxes. You get the picture.
Study up a little bit. Here’s a couple of websites with information that may be helpful http://www.actuary.org & http://www.ncpa.org.
Unfortunately, for an “editor” of an industry publication – you’re alarmingly out of touch with the industry you claim to represent.
Even using the term “Health Care Reform” is laughable. We’re not being threatened with “Health Care Reform” – we have the greatest and most effective Health Care system in the world – What we’re being coerced into is “Health Insurance Reform”
Everyone has access to Health Care in the USofA. Even if you were a homeless, drug addicted, illegal immigrant and you strolled into an Emergency Room – YOU GET ACCESS TO HEALTH CARE.
>>”This last really gets me because the people spouting this nonsense don’t believe health care is a right but they don’t want to make it a responsibility either”<<
Health Care is a right that people already have (see Hippocratic Oath, or Preamble of Constitution) Health INSURANCE is a luxury. And REQUIRING “Free” Americans to purchase this luxury is NOT responsibility – Responsibility would be obtaining coverage BEFORE you need it. (You don’t try to insure your house when its already on fire, nor do you try to insure your life when you’re already dead)
In regard to the complaints that coverage is too expensive – Coverage is only as expensive as the claims require. If it weren’t for Existing Government Mandates requiring coverage for people that should be able to qualify (house burning) or the cost shifting that’s associated with Provider’s attempting to recoup the financial shortfalls that go along with Medicare – Coverage would be exponentially more affordable.
Don’t drag the rest of America down due to YOUR irresponsibility.
Steve, nationalized health care will cause thousands of health insurance agents to lose their jobs. Did you know that under the Obama plan there will be no new private policies sold? You can keep your current coverage as long as you can afford it or as long as your employer is willing to pay for it. If you change jobs or your employer can no longer afford it you will be forced to join the government plan. How is that fair competition? The AHIP is correct there would not be a level playing field. The govt prints its own money. They would control the marketplace and control the cost of health care.
Please name one country in the world where nationalized health care works better than the free market system we currently have? Our current system may be flawed but it is still the best health care system in the world. In Canada and Britain people wait 3 years for a simple procedure that would require virtually no wait in the USA.
In a nationalized system the only way to control costs is to simply perform less procedures. That is why people wait years for surgery or senior citizens don’t receive needed surgery. In a nationalized system you are literally allowing the govt to decide whether you live or die. Personally I trust my doctors a heck of a lot more than I trust the govt.
Thanks for telling it like it is, Steve. Having experienced our Alice-in-Wonderland health care “system” directly, as well as vicariously through my clients, I’ve felt for 30 years that there’s got to be something better.
We spend 1 1/2 times more per person on health care than the next costly industrialized nation yet we rank 30th in the world in quality of health. Hellooo so-called business people, “conservatives” and financial advisers. If our health care system were a corporation that you managed, how long would you tolerate those economic disparities? Not for a minute. If our health care system were owned by Honda, they would turn it into a single risk pool and single payer system I guarantee you. Because that would be the most efficient and effective.
The “market” often fails. It’s incentives are perverse. Just watch the flick, “The Corporation”. Seriously. Watch it. There is nothing partisan, false, exaggerated or biased in it. Do go another 40 years believing the same things you always have believed.