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Private Insurers Should Have to Perform or Perish

3 years ago

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Senior Correspondent

Should people be able to buy health insurance from the government if they don't like their choices in the private insurance market?

A government plan, perhaps modeled on Medicare, would offer more choice for consumers and spur private insurers to improve their coverage.

But for conservatives and the insurance industry, a public plan is an ideological nightmare. There's no question it would expand the size and role of government. And what if it became more popular than private insurance? We're talking about a real-life referendum on health care delivery, and I say let it rip. Let's put it to the test. Let's see what Americans do when they have a choice between two institutions they rely on but don't much trust.

This is not an outlier view. In a Kaiser Family Foundation poll last month, there was 67 percent support for "creating a public health insurance option similar to Medicare to compete with private health insurance plans."

That's not to say two-thirds of the country plans to sign up for government-run care. Choice is the key concept. Only 49 percent in the same Kaiser poll supported "having a national health plan in which all Americans would get their insurance from a single government plan."

Some liberals are unabashed supporters of such a single-payer system. A House bill expanding Medicare to cover all Americans has more than 70 co-sponsors. And eight protesters disrupted the Senate Finance Committee this week with shouts of "Put single-payer on the table."

But mostly Democrats are moving in the other direction to mollify critics of adding a public plan to the marketplace. There's a lot of talk about leveling the playing field so government won't have an unfair advantage over private insurers. Under proposals by Sen. Charles Schumer (D-N.Y.), a public plan could not receive government subsidies, require health care providers to participate, and set low reimbursement rates to save money.

The whole exercise will be pointless, though, if efforts to protect the insurance industry hobble the government. As Tom Daschle wrote in Newsweek this month, reforming health care is supposed to benefit Americans – "not the companies that profit from it."

Proponents of a public plan say that like Medicare and the Veterans Administration it will be able to reduce costs, improve patient outcomes and offer more choice of doctors. The bottom line for private insurers: perform or perish.

Facing the threat of a government competitor, insurance companies are practically begging for federal regulation. You want health insurance nirvana? Just force their hands. Make them stop having to throw sick people under the bus in order to make money.

Karen Ignagni, president and CEO of America's Health Insurance Plans, serving 200 million, has a vision: "No one falls through the cracks, no one is discriminated against because of pre-existing conditions, and no one has to pay according to health status. And there would not be gender differentiation."

The way to get there, she told the Senate Finance Committee, is to put all that in "very clear specific and effective government regulations," and include a requirement that everyone buy coverage. "We are ready to be accountable to those rules," she said.

At least 21 senators are skeptical. "An alternative to private insurance will help keep that industry honest," they wrote in a letter this month to key committee chairmen. Democrat Sherrod Brown of Ohio went further. He said private insurance companies "always seem to be one step ahead of the sheriff."

Senate Finance Chairman Max Baucus calls the public option an 800-pound gorilla. Many in Congress say they won't support a bill unless it has a public option, he says, and many say they won't support it with a public option.

With a bill slated to emerge from his committee in June, his temporary solution is to try to build momentum on more popular items first. The public option is on the table but "a little bit on the side of the table," Baucus says.

Some liberals are willing to be patient. "If you begin with a series of non-negotiable demands, it's very hard to get the conversation started," says John Podesta, president and CEO of the Center for American Progress.

The Senate is a hard sell. At least two Democrats, Nebraska's Ben Nelson and new party member Arlen Specter of Pennsylvania, have said they would not support a health reform package that includes a public option. A third Democrat, Evan Bayh of Indiana, has said he's "agnostic." A moderate Republican, Olympia Snowe of Maine, might consider a "trigger" that sets up a public plan if the private market doesn't shape up on its own, a Snowe aide said.

Democratic leaders have reserved the procedural possibility of passing a health plan with only 51 votes as opposed to the 60 that are needed to shut down debate and move ahead on legislation.

Given Republican and even some Democratic opposition to the government insurance option, any package that could get 60 votes wouldn't include it. The most likely path to getting it done is with 51 votes.

One big mystery is whether President Obama's priority in the end will be bipartisanship or the public plan. He campaigned on a health reform proposal that included the public plan and "nothing has changed," says administration health spokeswoman Linda Douglass. "He's for it, because it is a means of cutting costs and increasing competition in the marketplace. We want to build on the current system."

On the other hand, Obama is also still for bipartisanship. "He's always said that it is his hope and belief that this bill will emerge from a bipartisan process. That is what the administration is aiming for," Douglass says.

For those of us wondering where Obama will draw the line, it'll be a telling test.

Filed Under: Health Care

Tagged: healh care, HealhCare

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