Ruth Marcus tells Democrats not to go to the wall for it. She is not personally against the presence of a public plan, she just doesn't think it is a "do or die" question. There are other ways of making the sector more competitive, if need be.
Here is the veteran commentator Wisewon on the public plan.
As Ezra Klein indicates, the health insurance exchanges are a more important part health care reform. Here is a progressive symposium on the public plan; read Paul Starr.
Brad DeLong writes:
We should set up a public plan, let it compete with the privates, and
see if it can provide care people like more cheaply than the private
insurance companies. Friedrich Hayek would approve: the idea is to use
the market as an institutional discovery mechanism.
Is this the SOE model? I'm still stuck on what the public plan will be instructed to maximize, much less what it will end up maximizing after ?? years of Congressional interference. And exactly who in our government will mimic the behavior of shareholders?
this is what I don’t get. We have a public plan already: Medicare. On a practical level, they control all health pricing already. Private insurance companies just follow medicare’s lead with all reimbursements. How is a public plan going to help save money?
I don’t understand the need for a public option. If you want to expand competition just allow people to purchase insurance across state lines. There are already something like 1,300 providers — why would the addition of one more suddenly produce such a decrease in costs?
Further the notion that a public option would compete on a level playing field strikes me as naive. Existing public options don’t do this. The USPS is currently facing massive losses that are picked up by the taxpayer, unlike Fedex or UPS. 11% of K-12 students attend private schools rather than the public option even though the public option is free while private schools have an average tuition of over $8K.
Given the inefficiencies that predominate in government and competition already found in the health insurance sector (I read profit only accounts for 3% of health insurance dollars) I see no obvious way the public option could offer a similar service at comparable costs. That is the real guarantee that a public option won’t compete on a level playing field. If it did there is the chance that hardly anyone would use it, which would be deeply embarrassing to the politicians, that have made this a centerpiece of reform. Will anyone be willing to admit that it was a failure and then scrap it? They will have to tilt the field to ensure its success.
“We should set up a public plan, let it compete with the privates…”: Mr Broad deRound takes you all for a bunch of suckers. I wouldn’t have the insolence to advise Americans about how they should reform their absurdly extravagant medical system, but even I can see that no “public plan” would compete, except in the sense of exploiting huge taxpayer subsidies to let it suppress its competitors.
chuck:
Because the public plan will mimic medicare in its lower adminstrative cost.
colin:
because it is easier than 100 anti trust cases againt the localised monoplies of current employer-based healthcare companies
Jeff:
You are rifgt in that control should not be directly in the hands of congress, but a administrative board similar to a board of directors would be pretty good. But then again if I compare this to a similar item, the Fed, I get the sense that it may be a non-political body that becomes overly involved with politics itself… What do they do in France and Germany, we should just do that.
Travis: that’s a good argument for eliminating the tie between employment and health care, which is an artifact of WWII wage controls.
You’ve at least got the gist of it Don. The most important thing we need to do is force people to shop around. Until that happen costs will continue to skyrocket.
The really radical, and necessary, reform that no one is talking about is ending insurance as the centerpiece of health care in this country. Insurance should be for catastrophic and emergency conditions — think heart attacks and cancer. For most other procedures you should have to shop around. Think of all the paperwork and bureaucracy this would cut down on!
colin: “Insurance should be for catastrophic and emergency conditions — think heart attacks and cancer. For most other procedures you should have to shop around.”
Why? If consumers wish to pay a fixed amount for all their health care – and they’re willing to pay that price – are you and libertarian Don going to prevent them for choosing that option?
What is wrong with employers providing full coverage health insurance? Even if the tax benefit of employer-provided health insurance were eliminated, wouldn’t many employees prefer to take advantage of the buying power their employer can provide them?
It’s not the private health insurance industry that drives up costs by increasing usage. Provate insurors pass on costs to ultimate consumers through higher premiums. It’s the free riders – Medicare and Medicaid beneficiaries – who consume without incurring the costs of that consumption.
Ben K: “A lot of private insurers have >20% overhead. Medicare is, from the numbers I’ve read, well under 10%.”
Here’s one explanation:
“A draft report by the inspector general of Health and Human Services — circulating on Capitol Hill and leaked this week — determines that Medicare may have paid $2.8 billion in improper or fake claims for medical equipment in 2006. … insurance companies spend money to screen their claims for fraud. Medicare automatically pays more than 95% of the bills it receives. This lack of scrutiny reduces overhead, but it makes the program highly vulnerable to abuse.”
Fake claims for medical equipment is just one of many, many ways medicare is being defrauded:
“Law enforcement officials said it’s just one of the many widespread, organized and lucrative schemes to bilk Medicare out of an estimated $60 billion dollars a year — a staggering cost borne by American taxpayers.”
And exactly who in our government will mimic the behavior of shareholders?
One would hope, no one. Do you believe that the shareholder demand that insurers deny coverage to the high risk individuals, deny preventative care as unnecessary because the policy can be cancelled with the insured develops a chronic condition, and raising premiums to extract maximum revenue and maximum profit is something that increases the general welfare of the economy/society?
Of course, if I were writing the charter for the public plan, the number one priority would be “maximize the health of the nation.”
Lots of evidence indicates that a sort of laffer curve exists between spending on so called health spending and outcomes. Spend too little and the health overall is lower than it should be, but on the other hand, spend too much and health is also lower that it should be, but spend somewhere in the middle and health will be maximized, as long as the system is well managed.
Clearly “free market health care” has driven spending well beyond the value that will maximize health, clearly indicating that the “free market health care” is absolutely terrible at managing the spending on health care in furtherance of maximizing health.
So, how much more badly can government do than the free market?
And all you need to do is look at any of the other OECD nations with better longevity, infant mortality, lower rates of births requiring neonatal care, lower levels of bankruptcy because people got sick.
And for those who think that the US has a great system, just think about suffering some sort of personal crisis like discovering you have lupus, drug resistant TB, ALS and you end up out of work for a period of time. Would you rather be in the US in say Alabama, in Socialist Massachusetts where only 3% lack health insurance, or in some place that spends far less than the US on health care like France, Switzerland, Canada, Sweden, that also have a great social welfare system as well?
Vehicle Driver: how can you argue that it’s possible to have a big effect on the statistics by treating “outliers”, while at the same time claiming that the important thing is cancer which you say is “rare”?
Also, in the socialist systems, not only are you allowed to buy your own insurance, but you can get it tax-deductible through your employer.
So far as I can see the main drive against national healthcare in the US appears to be the belief that poor people are always poor because of lack of effort, and should therefore suffer or even die for that.
mpowell: “You are also contending that the primary explanation for improved outcomes in other systems is preventative treatment for those who would be uninsured in the United States.”
I don’t think Vehicle Driver has accepted the assertion that other health care systems deliver improved outcomes. I certainly do not believe that to be true.
The “outcomes” which socialists use to promote universal health care are generally infant mortality and life expectancy. A number of studies have shown that, in highly developed economies, health care does not determine these outcomes.
June O’Neill and Dave M. O’Neill compared U.S. and Canadian health care systems. Here’s their conclusion about infant mortality:
“low birthweight-a phenomenon known to be related to substance abuse and smoking-is more common in the U.S. For babies in the same birthweight range, infant mortality rates in the two countries are similar. In fact, if Canada had the same proportion of low birthweight babies as the U.S., the authors project that it would have a slightly higher infant mortality rate. Thus, the authors conclude that differences in infant mortality have more to do with differences in behavior than with the health care systems.”
And their conclusions about life expectancy:
“The gap in life expectancy among young adults is mostly explained by the higher rate of mortality in the U.S. from accidents and homicides. At older ages much of the gap is due to a higher rate of heart disease-related mortality in the U.S. While this could be related to better treatment of heart disease in Canada, factors such as the U.S.’s higher obesity rate (33 percent of U.S. women are obese, vs. 19 percent in Canada) surely play a role.”
Why? If consumers wish to pay a fixed amount for all their health care – and they’re willing to pay that price – are you and libertarian Don going to prevent them for choosing that option?.
No, consumers can choose what they want. But we should stop subsidizing that option with the tax credit.
And I agree with you re: Medicare/aid.
colin: “But we should stop subsidizing that option with the tax credit.”
Is that because you wish to level the playing field for all options or because you want the government to take more of our incomes?
I agree that government rules about taxes distort our decision-making. That’s true not just for employer-provided health insurance, but also for mortgage interest deductions, property tax deductions, business travel expense deductions, casualty loss deductions, education expense deductions, charitable contributions deductions, etc., etc. Of course, distorting our decision-making is exactly the intent of those who lobby for such deductions.
Is that because you wish to level the playing field for all options or because you want the government to take more of our incomes?.
Level the playing field. And agreed about the mortgage interest deduction, etc.
Wisewon: “For some reason, there doesn’t seem to be anyone on the right (not that I am, but I don’t support single-payer as you know) that can articulate a policy-oriented opposition to a public option…”
Yet, here we are, all day, every day. It’s just that the left doesn’t even believe in the things we talk about, like barriers to entry, the importance of the interaction of choice(S!) and competition to innovation, the forgotten man, gray markets, 3rd party payer problems, etc., not to mention the inefficiency of bureaucracy and the impossibility of public institutions to be tough with the incumbents that have captured them in their mythological pricing negotiations.
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