More to Health Reform than a Public Plan
(cc photo by fw190a8)
Last night Atrios said that without a public plan “there really isn’t much point to any of this. The public plan is the point.”
I think that’s wildly overstating the case. There are several different aspects of these health reform proposals and they’re all important on their own terms. Most notably, the design of the terms of new health insurance “exchanges” on which individuals and small businesses will be supposed to buy health insurance is extremely important. Appropriate regulations could make these sort of exchanges really work for people. And if we had a functioning individual health insurance market, then that would set us up down the road for breaking the link between employment and health insurance. A big part of what makes the public plan issue important is that I think including a robust public option in the exchanges would do a lot to help make them work well. But obviously the regulatory rules governing the exchanges are also a big deal on their own terms.
There’s also what you might call “the other public plan,” the proposals to expand eligibility for Medicaid. Medicaid’s not the greatest program on earth, but it’s a lot better than having no health insurance at all. And while haggling over exactly how much Medicaid should be expanded hasn’t yet captured the imaginations of the blogosphere, the extent to which the program is expanded will make a huge difference in the lives of the directly affected families. Then there are subsidy rate issues, and the whole question of putting tougher regulations on insurers regarding pre-existing conditions and price discrimination.
We shouldn’t let politicians off the hook on the public option, but we shouldn’t let them off the hook on everything else either. The health care sector is giant, so naturally a proposal for comprehensive reform winds up having a bunch of different components that are all important.
47 Responses to “More to Health Reform than a Public Plan”
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July 6th, 2009 at 8:34 am
Wrong, wrong, wrong. No, it isn’t. The ONLY way this legislation will ever accomplish anything is if it puts the for-profit health industry on the road to eventual extinction. Since our political system is far too bought-and-paid-for to just go directly to a rational system, the best we can do in that regard is a robust public option that can at least begin the process of squeezing out the for-profit parasites. Anything less will simply be corrupted into a Medicare Part D-like boondoggle.
July 6th, 2009 at 8:41 am
“There’s also what you might call “the other public plan,” the proposals to expand eligibility for Medicaid.”
Are you really this stupid, Matthew, or is it just part of your job description to defend the indefensible?
—–
I mean, seriously.
You defended the Iraq war.
You defended the decision to not fix the banking crisis.
And now you want to defend fucking up healthcare for decades to come by expanding the Medicare model?
Are you really sure you’re really a Democrat? Are you about to tell us you think Social Security should be privatized?
July 6th, 2009 at 8:42 am
“And now you want to defend fucking up healthcare for decades to come by expanding the Medicare model?”
Apologies. Change Medicare to Medicaid in the above sentence for it to actually make sense.
July 6th, 2009 at 8:43 am
Honestly, the biggest change I would like to see would be extending Medicare to include *everyone* under 18. I just don’t get why we don’t cover health care for our nation’s children…
July 6th, 2009 at 8:45 am
2x “wrong, wrong, wrong”.
If the bill is signed and there’s nothing to keep^H^H^H^Hmake private insurers honest, then it’s a failure. Assume, for argument’s sake, that private insurers are parasitical scum. The public plan, even though it’s already weak tea, scares the bejeezus out of them. Killing it makes them very very happy. The other elements, not so much. Simple as that.
if we had a functioning individual health insurance market
Uh huh. Now, can you give us an example of a functioning individual insurance market on top of a dysfunctional employer market? Tricky? How about a functioning supplemental insurance market on top of a system that’s essentially single-payer? Much easier.
If, if, if. Fuck that shit. Give everyone the right to have the plan that Co-Presidents Ben Nelson and Olympia Snowe and Blanche Lincoln get, at the price they pay.
July 6th, 2009 at 8:52 am
At some point we should probably just stop reading this blog.
July 6th, 2009 at 8:53 am
Medicaid is run by each state, I’m sure in some states its very well run, however in most places its a pretty crappy program. As I’ve mentioned before, a better program to build out is the Pentagon’s single-payer Tricare system (for servicemen, retirees, reservists and their respective family members).
July 6th, 2009 at 9:02 am
Matt’s just wrong.
If the fundamental problem with our health care system is that the greediest individuals have the most control over it, it won’t make much difference if we slightly expedite the ways in which we’re screwed by the greediest individuals.
If, on the other hand, non-profit organizations shift the focus toward healing people (rather than making money) it’ll be a step in the right direction.
The public plan IS the compromise.
July 6th, 2009 at 9:04 am
A public plan is needed because a lot of people will take it, then they will demand a better public plan, and even more people will join etc… until most private insurance companies go bankrupt. The government will be able to control prices and lower health care costs to the levels of Western Europe.
Also, all those people will forever vote Democrat, and make Republicans heads explode.
It’s good policy, and good politics.
July 6th, 2009 at 9:07 am
if we had a functioning individual health insurance market
There is one already. It maximizes profits, which is what a functioning market does. It doesn’t do much else.
July 6th, 2009 at 9:09 am
Steve and Petey – I am suprised by the vigor of your responses, but I don’t often read comments here so maybe I shouldn’t be.
Steve, if you’re convinced that the course of history is towards elimination of the private sector (which, notably, hasn’t been the case in other systems, so I don’t know why it would be the case here) then it seems like the other reforms (such as ones that break the employer-insurance link) are going to be critical to enhance the rate of that change.
M.Y. has, I believe, implied in the past that reform w.o. public option might be okay. I do disagree. Here I only think he’s suggesting that other parts matter too – reform with p.o. might not be enough.
July 6th, 2009 at 9:11 am
To add some backfill about Tricare– reservists not on active duty can buy into the Tricare system for $45 a month or $180 a month to include spouse and dependents. I noted here a couple of months ago (I’ll link instead of copying) how everyone would qualify for that deal if Congress simply amended two sections of USC Title 10.
http://yglesias.thinkprogress.org/archives/2009/05/transitioning-from-employer-based-health-care.php#comment-1602112
As that hippie president Dwight Eisenhower recognized, the way to get Congress to sign off on a new program is call it defense spending (e.g. The National Defense Highway System and the National Defense Education Act).
July 6th, 2009 at 9:13 am
The government will be able to control prices and lower health care costs to the levels of Western Europe.
Not going to happen – why argue things that are so outside the realm of political feasibility?
July 6th, 2009 at 9:15 am
TP Thinkfast may explain this post:
Matt got to pay his bills…
July 6th, 2009 at 9:16 am
It maximizes profits
Even the 40% that is non-profit? You can check on the salaries and benifits of these non-profits they are substantially lower than the median.
July 6th, 2009 at 9:22 am
Not going to happen – why argue things that are so outside the realm of political feasibility?
Not immediately, but eventually health care costs will have to be controlled. They can’t continue to increase at the current rate. If the public plan is popular (and a good one should be), government negociating power on the prices is a new way to lower the costs.
July 6th, 2009 at 9:24 am
@11: RJ, think real, real hard now. Is “private” synonymous with “for-profit”? Give yourelf plenty of time to come up with
the answer. (Of the usual European suspects in this connection only the Netherlands has a significant for-profit sector among its private insurance carriers. The German sickness funds are not only nonprofit, but have a very limited role as purchasing agents only; the risk-pooling is totally pubic and nationwide. In Switzerland basic coverage is totally nonprofit and only supplementary insurance is for-profit.)
July 6th, 2009 at 9:26 am
“Not going to happen – why argue things that are so outside the realm of political feasibility?”
Overton Window.
http://en.wikipedia.org/wiki/Overton_window
As even Max Baucus has belatedly realized, if the opening offer was “Medicare for All”, the public option would have been the compromise position. Since the public option was, in fact, the opening offer, the compromise is going to be even more watered down. Heck, the opening offer should have been “VA system for all” (government owned hospitals, doctors on salary) but socialism is just for old soldiers I guess.
July 6th, 2009 at 9:31 am
eventually health care costs will have to be controlled…government negociating power on the prices is a new way to lower the costs.
As long as private insurance is available, and as long as it pays more than the public plan, the best doctors and hospitals won’t accept the public plan – just like many doctors won’t take Medicaid patients.
The poor will go to “County” for the legal minimum of care. The middle class and above, with private insurance, will still demand the latest and greatest test and treatments. Little to no cost containment will be achieved.
July 6th, 2009 at 10:02 am
jmo,
I think who would take low government rates is Kaiser Permanente, which is run like a privatized VA system. KP owns most of its own hospitals, doctors are on salary and like the VA, has spent big on IT. KP just signed up for Gavin Newsom’s Healthy San Francisco plan which costs less per patient than Medicaid.
A public option system may lead to KP receiving a de facto national franchise on government funded health care, though I’m not sure if Kaiser’s management would be interested unless Uncle Sam made it worth their while.
July 6th, 2009 at 10:32 am
As long as private insurance is available, and as long as it pays more than the public plan, the best doctors and hospitals won’t accept the public plan
I thought the whole point was that a doctor who accepts Medicare patients will be required to accept the public plan.
July 6th, 2009 at 10:36 am
a doctor who accepts Medicare patients will be required to accept the public plan.
Where did you see that? I thought it was medicaid.
July 6th, 2009 at 10:39 am
Just wanted to say I agree with this:
“Most notably, the design of the terms of new health insurance “exchanges” on which individuals and small businesses will be supposed to buy health insurance is extremely important. Appropriate regulations could make these sort of exchanges really work for people. And if we had a functioning individual health insurance market, then that would set us up down the road for breaking the link between employment and health insurance.”
Also, noticed an interesting tension is Steve’s comments:
“The ONLY way this legislation will ever accomplish anything is if it puts the for-profit health industry on the road to eventual extinction.”
“…only the Netherlands has a significant for-profit sector among its private insurance carriers.”
So this legislation accomplishes nothing in terms of creating a functional health care system, if it doesn’t get rid of a something that, incidentally, has been known to play a significant role in at least one existing functioning health care system?
July 6th, 2009 at 10:46 am
The point is on top of your head. ONE country in the world- and one with a vastly different political culture form ours (the Medicare Part D looting would never have happened there)- has managed to tolerate a significant for-profit sector without experiencing the disaster we have created (but ALSO without matching the performance of the best systems- Germany, for example, clearly does a better job of making good care affordable by everyone.) Big whoop. It hasn’t worked here (to put it mildly), and it never will.
July 6th, 2009 at 10:48 am
(but ALSO without matching the performance of the best systems- Germany, for example, clearly does a better job of making good care affordable by everyone.)
Do you have a cite for that? I was under the impression that healthcare in the Netherlands was better than in Germany.
July 6th, 2009 at 10:56 am
Not talking about quality of care but affordability / accessibility.
Second, these nations try to tailor the individual’s contribution to the financing of health care closely to the individual’s ability to pay — almost perfectly so in Germany, albeit less perfectly in the other two countries.
Also, the for-profit insurance carriers in the Netherlands have a far more limited role and are far less powerful than US insurers. Claiming the Netherlands shows that OUR for-profit insurance can work is very much apples and oranges.
July 6th, 2009 at 11:10 am
I think the charitable way to read Matt’s post is that he is just trying to make clear that there are in fact other things we should be caring about in addition to the public option. So, this interpretation would suggest, he isn’t trying to argue people should care less about the public option, just that they should also care about these other things.
And if that is all he is saying, I don’t find that sentiment particularly objectionable–these other things do in fact matter.
July 6th, 2009 at 11:13 am
But, DTM, he was objecting to Atrios saying (correctly) that those other things won’t matter WITHOUT the pubic option. That rules out your charitable reading.
July 6th, 2009 at 11:20 am
So this legislation accomplishes nothing in terms of creating a functional health care system, if it doesn’t get rid of a something that, incidentally, has been known to play a significant role in at least one existing functioning health care system?
The current multi-payer element of the Dutch system only dates from 2006, and most observers think it’s still too soon to tell how it’ll pan out in terms of competition and efficiency.
You also have to consider the trajectory here: the Netherlands went from a private/public split based upon an income threshold to an individualised 50/50 split between payroll tax and private premium, covering long- and short-term care respectively. Introducing a nationwide mandate and managed competition to that kind of system is very different from introducing community rating, a ban on rescissions and restrictions based on “pre-existing conditions” to the US, even with a substantial element of quasi-single-payer (Medicare) in the overall mix — not least because of the existing cost structures.
I’m not saying that it’s infeasible to get to the Dutch system from the existing non-system in the US, but giving something to private insurers is going to be a lot easier than taking something away, particularly when long-term care remains in the hands of the state.
Let’s put it this way: the average Dutch individual insurance premium is EUR100 a month, so around $140 at current exchange rates. Under-18s are covered by the state.
July 6th, 2009 at 11:25 am
But, DTM, he was objecting to Atrios saying (correctly) that those other things won’t matter WITHOUT the pubic option. That rules out your charitable reading.
I think “rules out” is a rather strong claim for an indirect implication. And note this is what Matt actually directly wrote in his conclusion:
I think that supports an additive and not subtractive interpretation (meaning his point appears to be that we should also care about these other things, not that we should care less about the public option).
By the way, I don’t think it is literally true that none of these other things matter without a public option. The public option is extremely important, more important than any other thing at stake, and I think we can and will get one. But some of these other things do have independent value.
July 6th, 2009 at 11:28 am
some of these other things do have independent value.
C’mon, DTM. Matt’s giving us the setup pitch for the slider, which is “well, look at what we got even if the insurance companies ended up writing the bill.”
July 6th, 2009 at 11:28 am
Purely theoretical value which will never be realized in practice unless there’s a strong public plan to discipline the insurance parasites.
July 6th, 2009 at 11:31 am
oh dear.
Atrios = right. Matt Yglesias = wrong, & not just a little wrong. And this is really not a difficult one to argue at all. Theoretical co-ops and “exchanges” mean nothing, and it’s notable that no tangible evidence of their potential success exists, as is the fact that no other country bothers because there simply is no reason to. the anti-health ‘movement’ in our country is exclusive to our country, and it consists entirely of people who make profits off of ever increasing illness levels.
“exchanges” don’t create market driven pressure or competition. they solve no important problems, and they make it possible to claim that something significant has been done when in fact it has not. come on! you know all of this!
the need for a public option is truly non-negotiable, and it is already a compromised position from one that would almost certainly work better in the first place. no more concessions on this basic premise!
July 6th, 2009 at 11:49 am
C’mon, DTM. Matt’s giving us the setup pitch for the slider . . .
And that would be the less-than-charitable interpretation. Personally, I honestly don’t know what Matt’s thinking.
Purely theoretical value which will never be realized in practice unless there’s a strong public plan to discipline the insurance parasites.
I don’t think that is correct. I think the better point is that while these others things would likely expand affordable coverage significantly in the short run, the lack of a public option will greatly undermine our long-term efforts to contain costs.
“exchanges” don’t create market driven pressure or competition.
Given the number of locales with high degrees of concentration in the health insurance market, I think it is quite clear that a national exchange system would in fact introduce quite a bit of new competition into the system as a whole.
July 6th, 2009 at 12:26 pm
What on earth is Matt’s reason for illustrating the post with a photo of an underground military hospital built in Jersey during WWII, for the Wehrmacht, by the Todt Organisation, using Ukrainian, Polish and Russian slave labour? I can see wingnuts doing this: look where Bismarck’s antirevolutionary Junker public health care option led – Nazi totalitarianism! The image is not even cute: many of the slave labourers died, so the tunnels are the site of a war crime.
July 6th, 2009 at 12:47 pm
Atrios said that without a public plan “there really isn’t much point to any of this. The public plan is the point.
No, Atrios, the public plan is not the point. The point is giving every American access to robust medical coverage. This will be done more cheaply via the introduction of a public plan. But it is not impossible to accomplish without one (just somewhat more expensive). And the introduction of a public plan, while highly desirable, is certainly not more important than community rating, or guaranteed issue, or sufficiently generous income/subsidy guidelines to make sure that nobody is suffering a critical erosion in living standards in order to have health insurance.
July 6th, 2009 at 12:49 pm
None of which, Jasper, will happen, or last even if they happen briefly, without the existence of a public plan to discipline the insurers. And cost control is every bit as important as access- it’s strangling out economy. Which, if it keeps going downhill, will leave us shorn of the resources to pay for those subsidies.
July 6th, 2009 at 1:02 pm
I think we should have a strong, straight forward single-payer health care model that stands apart from the private sector. I believe we should give the American people people a clear choice between the public and private models. I believe simplification, true competition, and lowered administrative costs will not only save the country future trillions but provide better health care for all its citizens.
Just kidding.
That is what I believed, like, two months ago when I lived in la-la land. Now I believe in pretending I want the possibility of a very vague, gray, nebulous thingy I’m suppose to call a public option. I believe this nebulous thingy should eventually be placed on a legislative chopping block so the insurance industry and Wal-Mart and anybody else who wants to wield a cleaver can chop it to pieces.
July 6th, 2009 at 1:22 pm
This subject illustrates very well the damage that neoliberal propaganda does to informed debate.
The basic idea of insurance is to spread the risk of a debilitating event over many participants so that the rare event cost is manageable for all. Each party pays a little bit so that all are protected against calamity.
A for-profit scheme precludes this approach from working. The risks are not spread evenly in a for-profit competitive system. In fact, a for-profit system introduces free-rider, recission and cherry-picking distortions that defeat the very prupose of group insurance.
Group insurance is a perfect example of an area where private enterprise is a bad way to operate.
July 6th, 2009 at 3:26 pm
This is a perfect example of when technocratic “wonkery” gets in the way of real world results and experience. I see this meme among the well-suited center-left segment of the punditshpere over and over again. From Ezra to Robert Reich (who is coming around at least), this class of prognosticaters seems blind to some fundamental truths: health exchanges and medicaid expansion are merely small-bore tinkerings. And while the same can be said of the current public plan – it is certainly not, by itslf, transformative, it has a the potential to be transformative. By bringing downward pressure on, and potentially underming, the medical industrial complex, we can significantly alter the future of health care. Without it, we are merely instituting small reforms that do little to change either the dynamics of the healthcare system or the politics.
There is a reason left Democrats are drawing a line in the sand here, Matthew, and is not because we are ill-informed or dumb. It’s because many understand the dynamics of power and the need for altering this hegemony. Get on board or get thown the fuck off, because I am sick of this shit. The more that annointed scribes and politicos indulge in this nonsense, the more it’s clear they should move along.
July 6th, 2009 at 4:00 pm
None of which, Jasper, will happen, or last even if they happen briefly, without the existence of a public plan to discipline the insurers.
Steve LaBonne: Respectfully, you’re way off base.
What I might not have articulated properly in our previous exchanges, but what I think Matt’s post highlights, is the real importance of various other pieces of the eventual legislation — especially those parts that regulate private health insurance — the means by which the majority of Americans receive their coverage. My point is, if we get this stuff right — the various things I consider to be the true deal breakers like national minimum coverage standards, community rating, guaranteed issue, etc. — then private health insurance companies will have been so radically transformed as to essentially function as publicly-regulated utilities.
Now, all things being equal, I’d just as soon not have a health insurance “utility” skimming its five or eight or ten percent off the top. You’re quite right to point out that this is a waste of money. But again, if we get this other stuff right, then the mere absence (a temporary one at that, I’d reckon) of another government-owned health insurance company (in addition to Medicaid, VA, Medicare, etc.) isn’t going to make the whole thing worthless. And remember, government subsidy rates could have a similar effect to that of a stand-alone government-owned competitor when it comes to cost-containment — and might even help precipitate the collapse of private health insurance in favor of single payer (in similar fashion to the hopes that many progressives have for the public option).
Also, it should be pointed out that, sadly, it’s entirely plausible to imagine a scenario whereby a public option is created, but other, vital parts of healthcare reform are left unaddressed – thereby setting up a situation where the government becomes the dumping ground — a vastly expensive government dumping ground at that — for the unhealthy. Another dangerous possibility is the establishment of a public option in a reform bill that doesn’t address cost containment with sufficient rigor, giving us a one time upfront savings followed by year after year of skyrocketing budgets for the public option subsidies — driven by that same profit motive we all agree is problematic in the provision of healthcare. A public option, after all, doesn’t remove the profit-maximizing incentives of doctors, private hospitals, clinics, medical device manufacturers, pharmaceutical firms and other providers of healthcare goods and services. The same forces that increase the size of Medicare’s tab will exist to expand the cost of the public option. The devil really is in the details on healthcare reform, and I think that’s all Matt is saying.
Again, we all want a robust public option to be included in any bill that gets to Obama’s desk. But Matt is correct to characterize as overstatement the contention that this one particular feature is “the point” of healthcare reform.
July 6th, 2009 at 4:16 pm
From Ezra to Robert Reich (who is coming around at least), this class of prognosticaters seems blind to some fundamental truths: health exchanges and medicaid expansion are merely small-bore tinkerings.
Jeff: of course they are. But if such measures were combined with national coverage standards and community rating and guaranteed issue and an individual mandate and generous subsidies/premiums as a % of income caps and an employer mandate/play or pay tax, and tax code changes, far from “small-bore tinkering,” we’d have ourselves a radical transformation in the way Americans get their healthcare coverage. We would in fact have robust universal health care. Adding a public option to the above features would substantially improve this list. But I’d still take the deal in a heartbeat over the mess we have now even without the public option. You?
July 6th, 2009 at 6:40 pm
Oh wow, health insurance companies would be regulated as well as public utilities! Why is that not reassuring….
I’ve been around the industry for a while, and here’s a newsflash- without a public option, the only thing that will change is the number of people telling you there’s help out there if you need it. Of course, none of them will actually know how to find this fabled help, but it makes them feel better to believe that only lazy people, who don’t look for the help themselves, can’t pay their bills.
It’s very striking that Matt considers himself well-educated, and can presumably hold his own in a conversation about health care, but basically has no interest in the matter. Maybe when health care is eating a full quarter of our GDP he’ll get interested.
July 7th, 2009 at 8:31 pm
expanding medicaid, i like it! we could make that the congresscritters’ sole source of healthcare….
July 9th, 2009 at 7:36 pm
Um, no.
Without a public plan *available to everyone*, the private companies will continue to operate in a cartel-like fashion, charge unreasonable premiums, deny and delay claims unreasonably, create unnecessary hassle, and rake off unreasonable profits.
Matthew misses this point. We need an alternative to the cartel. A government-run plan is the only plausible alternative; anything else can be shut down by the cartel.
That could be “Medicaid for everyone”, or “Medicare for everyone”, or “The VA for everyone”. Just the “for everyone” part and the part about it being run by the government and therefore immune to destruction at the hands of the cartel (as I’ve watched many formerly good not-for-profit health plans be destroyed) — that’s all that matters.
None of this other stuff you talk about is worth a damn: it is public option or it’s worthless.
July 9th, 2009 at 7:38 pm
Higher profits for the health insurance cartel, care just as bad, and businesses going bust because they can’t pay the fee to the health insurance cartel.
Sorry, try again. With a *public option*.
July 9th, 2009 at 7:41 pm
Yes, it is. It’s far more important. Proof: we have community rating and guaranteed issue in NYS. Doesn’t help much.
Yeah, they’ll just make it a *subcritical* erosion in living standards. Like my current “spend 1 day a week on medical paperwork and spend $10000 a year”. Yeah, I’m rich, it won’t make me starve. But it’s still absolutely disgustingly unacceptable.
No, you’re wrong. The only way to solve our problems is a *government-run* program — so that it can’t be taken over by the Cartel and used to rake off huge profits — which is *available to everyone*.