Public Plan’s Not All That Matters, But It Matters a Lot
This van was across the street from my house for some reason (my photo)
Jon Cohn makes an important point that I think all the smart health care writers are making—the presence or absence of a public option isn’t the only thing that matters in the health care debate. There are a lot of moving pieces to this puzzle, and things like how much subsidies are available to people to buy insurance, what do we do with Medicaid eligibility, what kind of minimum benefits package will people have, etc. are also crucial.
That said, I think there’s actually a pretty good reason for activists to be putting a lot of emphasis on the public option. Things like subsidy levels and eligibility points and the details of benefits packages are the kind of thing that, if health reform passes this year, are bound to get tweaked over and over again in subsequent years. The long-run trajectory of these matters is going to depend more on who wins elections, on the state of the overall budgetary picture, on the idiosyncratic desires of power members of congress, etc., than it will on what the initial starting point is.
The public option’s not like that. A well-designed robust public option will, if implemented, become an enduring feature of the landscape that’s unlikely to vanish. By contrast, if a major reform is implemented and doesn’t include a public option, it’s extremely unlikely that the kind of coalition that’s currently pushing for one will be reassembled any time soon. On other stuff, in other words, we can always come back for another bite at the apple. But for the public option, it’s probably now or never.
28 Responses to “Public Plan’s Not All That Matters, But It Matters a Lot”
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June 29th, 2009 at 8:46 am
Sorry, it IS everything. Without it you have at best a temporary Bandaid, at worst a Medicare Part D boondoggle.
I’m with the House Progressives (and I hope to hell they stick to their guns.) No strong public option, no bill. Period.
June 29th, 2009 at 8:47 am
Your second and third paragraphs were pretty much what I was thinking as I read your first paragraph . . . so, I guess I will just say “good post”.
June 29th, 2009 at 8:59 am
things like how much subsidies are available to people to buy insurance, what do we do with Medicaid eligibility, what kind of minimum benefits package will people have, etc. are also crucial.
These would only be crucial if there is no public option. Otherwise they would sort of take care of themselves.
June 29th, 2009 at 9:16 am
Now that the war for poverty has been won this little health care thing should properly be seen as a last futile gesture. It isn’t going to happen.
June 29th, 2009 at 9:32 am
There should be a public option. The public option will likely out-compete the private options, but hey. Competition is good, right? There are those who are obsessed with how the private market should “win”, so they want to rig the game, and not let people choose.
June 29th, 2009 at 9:41 am
Cohn makes a common, big mistake on subsidies. Without a public plan, generous subsidies are very dangerous. At this point, subsidies won’t make health insurance any more affordable. People will pay the same out of pocket cost for insurance, but insurers will get extra money from the government. Providers, in turn, will get more money from insurers.
This might not happen right away. it might not even happen until a Republican enters the White House, but it will happen. SHortly after it does, the costs to government for healthcare will be deemed so high that no reform will be considered to be effective and the government will get out of the business entirely.
Generous subsidies without a public plan are slow poison.
June 29th, 2009 at 9:42 am
This seems like code for “Serious” people. Well, to me at least, the smart health care have very little idea of the consequences of not having a public plan. For all of the vaunted cost savings they discuss, the public plan is the only “smart” way to discipline the insurance companies with cheap, efficient alternative.”
The more I listen to these scribes – inoculated from the serious dangers of the system – I realize they dont represent me and nor do they the vast majority of Americans. They are very quick to sell out the many to flatter their egos with technocratic reforms that bear a significant impact on our lives.
No more patronizing and no more capitulation. New writers and new politicians!
June 29th, 2009 at 10:12 am
Quit being nice to your health care writer friends and start poking them with a stick. Friendship is less about stroking and more about prodding. Anybody talking about the public option in anything less than an Apollo Creed “There is no tommorrow!” voice is missing the plot. Big Insurance wants to hurt you.
June 29th, 2009 at 10:31 am
Nobody wants to hurt you, they just want to take your money. Politics isn’t about good versus evil, and those who think otherwise lead to same mistakes we saw over the last eight years. The forces of opposition aren’t malicious fiends who get off on killing babies, they are morally flawed people working within a system that lets their selfish desires be directed in ways which harm others.
June 29th, 2009 at 10:32 am
By contrast, if a major reform is implemented and doesn’t include a public option, it’s extremely unlikely that the kind of coalition that’s currently pushing for one will be reassembled any time soon.
Maybe. But I’d argue it’s not necessarily the case that “the kind of coalition that’s currently pushing for one” will be necessary to introduce a public option if fiscal pressures force the government’s hand a few years down the line. For me, the deal breakers are: 1) Community rating; 2) Guaranteed issue; 3) TRUE universality; and 4) Subsidy levels (ie., capping premiums as a % of income); 5) Quality of coverage (ie., not crappy catostrophic plans but real, robust comprehensive insurance).
I would much prefer we get a public option from the getgo, but if we got the five features above, we would indeed have robust universal coverage — just a rather expensive variety of it. I think the president would be nuts to make public option a deal breaker. I strongly suspect the kind of coalition necessary to enact UHC is indeed an ephemeral phenomenon — one that coalesces once every decade in a half or so. So the opportunity to enact robust UHC must be seized. But we simply won’t be able to afford what I’ve outlined above for very long without a public option.
June 29th, 2009 at 10:38 am
Jasper, that would be a DISASTROUS outcome. It might make you feel good for a few years- after which it would collapse due to costs even more unsustainable than the current mess, and take the credibility of health-care reform with it for at least another generation.
No public option, no bill. Period.
June 29th, 2009 at 10:45 am
The forces of opposition aren’t malicious fiends who get off on killing babies
They do, however, get off on letting babies die by neglect.
Politics isn’t about good versus evil
Sometimes it is, since bad people exist. Lustful murderers-by-proxy like William Kristol, for example.
June 29th, 2009 at 10:47 am
Or Rush Limbaugh. Truly a bad person. Recall what he said about torture.
June 29th, 2009 at 10:55 am
I believe the technical term for somebody who doesn’t account for the consequences of their own actions (like say, an insurance exec who is involved in a baseless policy recission to tweak the bottom line) is ’sociopath’. The most generous reading of the status quo is Big Insurance isn’t trying to hurt you, they just don’t care about you one way or the other. Wonderful people to have at the heart of your health care delivery system, no?
June 29th, 2009 at 11:07 am
The most generous reading of the status quo is Big Insurance isn’t trying to hurt you, they just don’t care about you one way or the other. Wonderful people to have at the heart of your health care delivery system, no?
Exactly. the likeliest reason for people to choose the public insurance option is that they then will have some democratic control of its priorities, ie health can be valued higher. A private insurance company, and especially a corporation, is actually forced by law to look out for shareholder interest, which usually means profit. Shareholders are self-selected people who have invested money, so they usually care about money return, first.
And the more acute your healthcare need is, the less it is a market transaction inherently, since you don’t really have a choice in whether you want to live.
June 29th, 2009 at 11:08 am
Would it be nice if people not going into poverty to pay off medical bills were not based so much on trivial political discourse? I think so. This is an important moment, as Yglesias’ last paragraph in the post suggests. Pelosi and company really need to move to get this going (have they wasted their time and made themselves indebted to centrists with Waxman-Markey? If yes, would it have been worth it? How should I know?)
June 29th, 2009 at 12:17 pm
No public option, no bill. Period.
I think “no bill” is a more disastrous outcome, Steve. There are tens of millions of Americans without adequate access to healthcare. For such people, waiting another fifteen years for peace of mind is, um, disastrous, and quite possibly fatal. Again, the five points I mentioned are deal-breakers for me. But if we got all five and no public option, the only problem I see is one of public finances. I’m convinced once they have UHC, Americans won’t give it back. So the only way to rectify a fiscal crisis brought on by excessive subsidies to Big Healthcare would be a massive tax increase, or the introduction of a public option. I think the latter if far more likely.
June 29th, 2009 at 12:19 pm
without a public option, the same people now running the show will continue to run it for their profit only. As long as this system is based on their profit it will be inefficient for delivering health care (because it is designed to be efficient to provide profit). Only a public option will be true reform. Anything else is simplya reshuffling of the deck that will still end up with the same people holding all the face cards.
On the other hand, the creation of a real public option will spell the eventual death of the “for profit” medical business, which cannot happen quickly enough for our people’s health, and for our economy.
June 29th, 2009 at 12:42 pm
I know you think that. I explained exactly why you’re wrong. Your political calculation about the effect of a worse-than-part-D cluster#$%*(the almost inevitable outcome of a Senate “compromise”)is just way, way off the mark. The public would instead conclude that the Right was correct to denounce government involvement in health care. The average not-very-informed person judges by results, without much ability to go beneath the surface and figure out what was behind the result.
I want to cover everybody just as much as you do, but cost control is not optional. It MUST be an integral part of the plan or the plan will fail catastrophically. And there simply is no prospect of effective cost control without giving the insurers some stiff public competition.
June 29th, 2009 at 1:07 pm
The public would instead conclude that the Right was correct to denounce government involvement in health care.
Why? If we went from today’s 84% coverage — with much of that coverage wracked by the problems (rescission, unaffordability, job lock, denial of treatment, etc), to 99% coverage with the aforementioned problems legislated out of existence, why would the public be unpleased?
I agree reaching such a destination without a public option would be needlessly expensive. I just think it’s obvious that the country would see a rather non-trivial increase in average living standards. And I think once gained, this increase in living standards couldn’t be taken away any more than Social Security can be taken away. The politics wouldn’t allow it. Which means when bond rates start to back up, and Americans get a preview of the tax increases they’d have to pay to forestall a public option, we’ll, er, get a public option.
Again, I would strongly prefer that the reform bill include a public option. I just think an otherwise good bill shouldn’t be vetoed because — as a result of lack of a public option — it’s expensive. Too many lives are at stake.
I want to cover everybody just as much as you do, but cost control is not optional.
I agree it’s not optional. It will have to be tackled soon. Almost certainly within the next five years. It just doesn’t have to be tackled in 2009.
June 29th, 2009 at 1:27 pm
Because their own costs will skyrocket (the predictable effect of large government subsidies without effective cost controls is massive cost inflation.) Many will not even continue to have coverage at all (because many more employers will have to drop coverage.) You really think Congress will provide the revenue to vastly expand the scope of the subsidies when this happens? Impossible.
I’m sorry, this is just wrong. The cost even of the current system is strangling the economy. One thing Obama is dead right about is that we can’t put off dealing with that.
June 29th, 2009 at 3:43 pm
Because their own costs will skyrocket (the predictable effect of large government subsidies without effective cost controls is massive cost inflation.) Many will not even continue to have coverage at all (because many more employers will have to drop coverage.
Steve: interesting point, but I don’t know why you’re making it to me. I already stated (@10) one of my deal breakers is true universality. If Congress doesn’t allocated the funds to extend coverage to everybody, then no system, with or without a public option, is acceptable in my view.
The cost even of the current system is strangling the economy. One thing Obama is dead right about is that we can’t put off dealing with that.
I agree the costs of the current system are excessive, and need to be addressed. But it’s a bit of an exaggeration to say this system is “strangling” the economy. The OECD, for instance, is forecasting faster growth in the near term for the high cost US than for low cost Japan and Europe (to say nothing of the dismal short term prospects for budget healthcare Britain). Obama is correct to bargain hard at this point, but it’s simply not factually accurate to say we can’t put off dealing with the cost issue. We ought not to, mind you, but the Republic isn’t going to dissolve if a public option if enacted in 2013 instead of 2009.
By the way, just so I understand you, if my five conditions were met in a bill that makes it to Obama’s desk, is it your position that he should veto it? For the record I think a reasonable case be made in favor of the veto, just not a progressive one.
June 29th, 2009 at 4:14 pm
You’re just not getting it. Universality, if even achieved, will be a brief flash in the pan. The sharp inflation caused by heavily subsidizing the insurance quasi-monopolists will throw many more people out of the employer-based system. And the money simply will NOT be there to extend the subsidies to them. Your plan is doomed to be self-defeating. And you have far too rosy a view of the likely consequences of that.
Another point I should have made is that we MUST break the connection between employment and health insurance, which does huge economic damage. From a political standpoint it probably can’t be attacked directly and immediately, so the public option is the only way to insert the thin end if the wedge.
June 29th, 2009 at 4:19 pm
without a public option we will all be at the mercy of private insurers.
still…
nothing will have changed.
oh, there will be small, mostly cosmetic changes, but ultimately, the current system will still be in force and rolling along.
no moe pre-existing condition exclusions?
easy, just charge the heck out of any such policy that an insurer has to write.
what everyone seems to be missing is that the “reform” is actually going to make matters worse for many citizens.
you can bet your house that there will be a mandate provision in this “reform”.
so, not only will citizens still have to purchase insurance from private insurers, but they will be mandated to do so. probably under penalty of a fine.
what is coming is as clear as a train coming down a track:
no public plan.
an individual mandate.
no real limits on how insurers can charge those with pre-existing conditions.
obama’s strategy is clear: pass a bill, any bill, cause people are too stupid to understand the difference between real reform and a continuation of the status quo.
a few weeks ago, lots of obama supporters scoffed at the idea that he was going to sell out on health care.
i hope they are watching, cause it is happening right in front of all of us.
June 29th, 2009 at 6:11 pm
You’re just not getting it. Universality, if even achieved, will be a brief flash in the pan.
Nonsense. Universality in healthcare will no more be a flash in the pan than universality in state pensions. Once an electorate gains a major new social insurance benefit, it’s virtually impossible to get them to give it up. Hence the inability of conservatives in the US to lay a glove on Social Security. Hence they uniform support among conservatives in Britain and Canada for state-guaranteed universal healthcare.
June 29th, 2009 at 8:21 pm
AMERICA’S NATIONAL HEALTHCARE EMERGENCY!
It’s official. America and the World are now in a GLOBAL PANDEMIC. A World EPIDEMIC with potential catastrophic consequences for ALL of the American people. The first PANDEMIC in 41 years. And WE THE PEOPLE OF THE UNITED STATES will have to face this PANDEMIC with the 37th worst quality of healthcare in the developed World.
STAND READY AMERICA TO SEIZE CONTROL OF YOUR NATIONAL HEALTHCARE SYSTEM.
We spend over twice as much of our GDP on healthcare as any other country in the World. And Individual American spend about ten times as much out of pocket on healthcare as any other people in the World. All because of GREED! And the PRIVATE FOR PROFIT healthcare system in America.
And while all this is going on, some members of congress seem mostly concern about how to protect the corporate PROFITS! of our GREED DRIVEN, PRIVATE FOR PROFIT NATIONAL DISGRACE. A PRIVATE FOR PROFIT DISGRACE that is in fact, totally valueless to the public health. And a detriment to national security, public safety, and the public health.
Progressive democrats the Tri-Caucus and others should stand firm in their demand for a robust public option for all Americans, with all of the minimum requirements progressive democrats demanded. If congress can not pass a robust public option with at least 51 votes and all robust minimum requirements, congress should immediately move to scrap healthcare reform and request that President Obama declare a state of NATIONAL HEALTHCARE EMERGENCY! Seizing and replacing all PRIVATE FOR PROFIT health insurance plans with the immediate implementation of National Healthcare for all Americans under the provisions of HR676 (A Single-payer National Healthcare Plan For All).
Coverage can begin immediately through our current medicare system. With immediate expansion through recruitment of displaced workers from the canceled private sector insurance industry. Funding can also begin immediately by substitution of payroll deductions for private insurance plans with payroll deductions for the national healthcare plan. This is what the vast majority of the American people want. And this is what all objective experts unanimously agree would be the best, and most cost effective for the American people and our economy.
In Mexico on average people who received medical care for A-H1N1 (Swine Flu) with in 3 days survived. People who did not receive medical care until 7 days or more died. This has been the same results in the US. But 50 million Americans don’t even have any healthcare coverage. And at least 200 million of you with insurance could not get in to see your private insurance plans doctors in 2 or 3 days, even if your life depended on it. WHICH IT DOES!
If President Obama has to declare a NATIONAL STATE OF EMERGENCY to rescue the American people from our healthcare crisis, he will need all the sustained support you can give him. STICK WITH HIM! He’s doing a brilliant job.
THIS IS THE BIG ONE!
THE BATTLE OF GOOD Vs EVIL!
Join the fight.
Contact congress and your representatives NOW! AND SPREAD THE WORD!
God Bless You
Jacksmith – WORKING CLASS
June 29th, 2009 at 10:22 pm
My health care plan
Let me ask everyone a question: Do you consider price and discount when buying Tylenol and Pepcid? I answer in the affirmative.
Here’s another question: Do you consider price when considering brain surgery? I answer in the negative.
Therefore, I suggest splitting health care costs into two categories:
1) Medical goods that a consumer could price and shop accordingly on.
2) Medical goods that a consumer cannot price and shop accordingly on.
Once you do this, you can split up medical costs into:
1) Costs subject to a deductible.
2) Catastrophic Costs.
And, further, you can say the following:
For 1) You don’t want third party payers, since you want the consumers to shop for the best price.
For 2) You can have a third party payer. In fact, you can have one: the Federal Government.
Now, here’s Milton Friedman’s plan:
“A more radical reform would, first, end both Medicare and Medicaid, at least for new entrants, and replace them by providing every family in the United States with catastrophic insurance (i.e., a major medical policy with a high deductible). Second, it would end tax exemption of employer-provided medical care. And, third, it would remove the restrictive regulations that are now imposed on medical insurance—hard to justify with universal catastrophic insurance.
This reform would solve the problem of the currently medically uninsured, eliminate most of the bureaucratic structure, free medical practitioners from an increasingly heavy burden of paperwork and regulation, and lead many employers and employees to convert employer-provided medical care into a higher cash wage. The taxpayer would save money because total government costs would plummet. The family would be relieved of one of its major concerns—the possibility of being impoverished by a major medical catastrophe—and most could readily finance the remaining medical costs. Families would once again have an incentive to monitor the providers of medical care and to establish the kind of personal relations with them that were once customary. The demonstrated efficiency of private enterprise would have a chance to improve the quality and lower the cost of medical care. The first question asked of a patient entering a hospital might once again become “What’s wrong?” not “What’s your insurance?”
I would add a Democratic Party addition to this plan: You could relate the deductible to income.
That’s my plan. Everyone covered.
I would add the following: I’ve no idea what the correct amount of money that we should spend on health care should be. That’s why I would like some portion of our medical bills to be subject to our own choice.
June 30th, 2009 at 6:39 am
Re: the same people now running the show will continue to run it for their profit only.
I don’t have a problem with any business making a profit as long as it is also serving the public interest and is not engaging in dishonest or unethical behavior. Jaspar’s reforms would address that issue and would force the insurance industry to change its business model to a radical extent. But it would probably be unsustainable and require a major overhaul in another generation, so yes, we’re better off getting poublic inusrance now, even a weak, limited plan that could grow into smething more robust down the line.
Re: The sharp inflation caused by heavily subsidizing the insurance quasi-monopolists will throw many more people out of the employer-based system.
You are assuming that the above would be possible. If a mandate is enacted on employers (other than the smallest businesses), then that won’t happen. Employers will have to cover their employees. They would end up raising their prices to do so, but that spreads the cost across the economy and camouflages the reason. Moreover insurers would still compete for larger enployer groups and so there would be at least some competitive pressure to keep premiums from going sky high. (And community rating would mean that they cannot charge widely disparate premiums)
By the way are you sure subsidized insurance would experience “huge inflation”? Have food stamps resulted in food inflation?