« A must-read: Perlstein on the Public Option | Obey's Blog | An innocent question: should government really be outsourcing national security intelligence gathering to homicidal right-wing extremists? (NYT on Blackwater/Xe) »
The Public Option as it appears in the Current Versions of the House and Senate Bills
From the inventor of the Public Option, Jacob Hacker.
Now you know what you're fighting for.
Some interesting tid-bits:
What problem would it help solve?
Despite what Paul Starr says here, the Public Option is not a superfluous luxury in the reform package. Without it, how much choice would people in concentrated markets have? If only one insurer has a provider network in your region, are you going to opt for any other plan? Without it, how much incentive would insurers in concentrated provider markets have to negotiate to keep service costs down?
Without it, how is this bill anything other than a corporate giveaway? Remember that Medicare rates on services are 20-30% lower than those of private insurers. And providers choose to opt in on Medicare. In other words, without a Public option the providers are being given a free 20-30% profit margin on services in the absence of a serious negotiator on the other side of the table.
Is this an insignificant 'sliver' of reform? Not if you're an incumbent insurer or service provider. It makes the difference between a big fat profit margin or a smaller market-efficient profit margin.
So anyone opposing the Public Option is either a big fat liar or a very small small person.
Update: Rasmussen poll showing significant fall in support for health care reform if public option is removed.
Late Update: A Slate piece on how many pundits attacking government-run health insurance actually have government-run health insurance.
Now you know what you're fighting for.
Some interesting tid-bits:
What problem would it help solve?
Most observers of health care know that the insurance market has become increasingly consolidated, with one or a small handful of insurers enrolling most of the privately insured in the vast majority of local markets and, in the process, driving up costs. The American Medical Association (which endorsed the reform legislation in the House) estimates that out of 314 metropolitan areas across the nation, 94 percent can be defined as highly concentrated, with two companies or even a single insurer dominating the market. This is a primary reason for a strong national public plan that can compete with private insurers on day one.What kind of solution does it provide?
Less well known is that provider markets, and especially hospital markets, have also grown increasingly consolidated. The vast majority of major metropolitan areas--some 88 percent of large metropolitan areas, according to 2006 study--now feature hospital markets in which one or two major hospitals dominate the market. Many insurers pay flagship systems and sole providers well above costs to ensure their participation--costs that independent analysts have determined are often themselves excessive because the hospitals in question are inefficient.
These two problems--insurer and provider consolidation--are related. They have driven up premiums for employers and workers, and they have encouraged insurers to control costs by shifting expenses onto patients or weeding out high-cost patients, rather than bargaining for lower provider payments.
The versions of the House bill approved by the House Ways and Means Committee and House Education and Labor Committee contain a Medicare tie-in that has two crucial characteristics:In other words, the bills to be considered in conference committee already contain a strong public option with a strong negotiating position and no problem in forming a provider network.
1. Providers participating in Medicare would automatically be considered participating providers in the new public plan, although they would have the right to opt out.
2. Initial payments to providers would be set at Medicare rates plus 5 percent. After three years, the Secretary of Health and Human Services could adjust rates. But during the crucial start-up period, the public plan would be able to piggyback on Medicare's payment methodology.
Despite what Paul Starr says here, the Public Option is not a superfluous luxury in the reform package. Without it, how much choice would people in concentrated markets have? If only one insurer has a provider network in your region, are you going to opt for any other plan? Without it, how much incentive would insurers in concentrated provider markets have to negotiate to keep service costs down?
Without it, how is this bill anything other than a corporate giveaway? Remember that Medicare rates on services are 20-30% lower than those of private insurers. And providers choose to opt in on Medicare. In other words, without a Public option the providers are being given a free 20-30% profit margin on services in the absence of a serious negotiator on the other side of the table.
Is this an insignificant 'sliver' of reform? Not if you're an incumbent insurer or service provider. It makes the difference between a big fat profit margin or a smaller market-efficient profit margin.
So anyone opposing the Public Option is either a big fat liar or a very small small person.
Update: Rasmussen poll showing significant fall in support for health care reform if public option is removed.
Late Update: A Slate piece on how many pundits attacking government-run health insurance actually have government-run health insurance.
Advertisement
Make sure . . .
. . . you check out my Cafe blog for the President's remarks today in his 53 minute address to Organizing For America Forum on Health Care.
~OGD~
August 20, 2009 3:34 PM | Reply | Permalink
Seconded. And be sure to recommend, as well.
August 20, 2009 4:05 PM | Reply | Permalink
I recommend Loosey's recommend.
August 20, 2009 6:05 PM | Reply | Permalink
As usual, I concur with amike!
August 20, 2009 8:18 PM | Reply | Permalink
thanks for staying on top of this, Obey.
Imagine if the constitution were just a superfluous sliver of what was required to form our democracy.
Health reform without a public option would be like our solar system without gravity. There would be no larger natural force to keep things aligned--everything would be out of control.
August 20, 2009 4:23 PM | Reply | Permalink
"Health reform without a public option would be like our solar system without gravity."
- Beautiful. I'd been looking for the right analogy. There is nothing in the current setup that is governed by the Laws of Markets. Or any laws whatsoever, for that matter...
August 20, 2009 4:32 PM | Reply | Permalink
seems right, think about how out of control the health insurance monopoly is now-- reckless, running rough shod over people's lives, leaving the sick in the dust, bankrupt, even dead.
This is a white collar hurricane, a private market tornado, whirling with insatiable greed, ravaging America's health and well being, destroying businesses, homes and families--and hundreds of thousands of people are left in its ever-widening unforgiving wake. You think you're protected? You're not protected. You think you're covered? You're not covered. Wade through any one of those five hundred page rider clauses.
There has to be a counter force. Powerful enough to bring balance and order to the chaos.
August 20, 2009 5:29 PM | Reply | Permalink
The danger is that some people believe that this broader trend towards corporate feudalism is unsustainable, that it must revert towards 'balance' as a matter of course, that we can offer ever more extravagant sops to the Capitalist Cerberus in exchange for a little more health care crumbs, a few mortgage mods, some movement on pollution, etc. Somehow, someday, it will collapse under its own weight. That isn't how it works. Not putting these mad dogs on a leash today just makes them bigger and stronger for the next fight.
August 20, 2009 6:55 PM | Reply | Permalink
We've already got these Corporate Goons on a leash. Unfortunately, it is at the ownership end of the leash that is controlling the ill-informed "mad dogs" that are showing up at these Health Care Town Hall Meetings.
Somehow, we need to get these mad dogs to understand the reality of what you have so eloquently laid out here. The system is corrupt. There is no "free market" at play. And the American people - yes, even the mad dogs - are continually being sold out to the highest bidder in a crass game of circle-jerk in Washington.
It is my dream to see these mad dogs finally seeing reality for what it is, and then to watch as they turn quickly upon their present leash-tenders to get at their throat and finish them off. Justice would be served, and it would be a long time before any other corporations would attempt to so cynically manipulate public opinion through fear-mongering and lies for their own self-interest such as we've witnessed in this policy "debate."
Great post, obey! I really appreciate the background material and your analysis. Great Stuff!
August 20, 2009 10:03 PM | Reply | Permalink
I hear ya' ... LOUD and CLEAR! . . .
~OGD~
August 21, 2009 3:32 AM | Reply | Permalink
TMPGary, This is so true. Look at what happened in the wake of Katrina. The horror stories of insurers who refused to pay up mirrors the conduct of the insurance industry.
Insurance as presented and the reality are very different. This is an indicator of the industry operating on fraudulent principles as a fundamental guide to doing business. Look at what AIG did. That was an immense fraud. Compounding the fraud is they have not been held accountable. No economic scheme ever devised can be sustained where products are offered tied up with a pretty bow but in fact have far less value than what is represented. Under that regime, failure is inevitable.
August 21, 2009 4:05 AM | Reply | Permalink
"Not if you're an incumbent insurer or service provider. It makes the difference between a big fat profit margin or a smaller market-efficient profit margin.
So anyone opposing the Public Option is either a big fat liar or a very small small person."
Great post. Great conclusion.
See, we'll keep you up this time.
August 20, 2009 4:27 PM | Reply | Permalink
Thanks Dick. I'm happy if this one stays up. That Hacker piece is really good!
August 20, 2009 4:33 PM | Reply | Permalink
Great catch! I wish the graphics were easy to pull out of it, there are some important illustrations in the article that would really enhance this post.
Again, most awesome.
August 20, 2009 5:08 PM | Reply | Permalink
Thanks Kgb. I'm too incompetent for the graphs, sorry...
August 20, 2009 6:42 PM | Reply | Permalink
Excuse me, but I wonder if some of you could click on "Weekly Immigration Wire: Silence Strengthens Opposition. It's important, at least to some of us...concerning the intertwining of the health care protests and ginning up anti-immigrant fervor. Again. Yet. Still. Hate comes so easily to so many. And the Obama admin is throwing its money into the nasty 287-g program; I have to believe he knows not what might be wrought along these lines. I perhaps have written about that enough; though...maybe not. It is not a subject many have felt alarmed about.
The blog contains one of those grey boxes with a little red X, meaning I can't access a graphic or video, much less recommend or make a comment.
If someone who CAN access it, could mention to Weekly that it is preventing rec's and comments, I would sure be obliged!
And good post, obey, you are studying the hell outta this one.
August 20, 2009 5:09 PM | Reply | Permalink
Thanks Wendy. Got a link for that?
August 20, 2009 6:46 PM | Reply | Permalink
Sorry; i thought you'd see it under Recent Reader Comments. Sorry to intrude; i wanted to ask on a blog that would get enough rec's to stay up awhile. Didn't mean to intrude, but i did...
August 20, 2009 7:21 PM | Reply | Permalink
Feel free to lobby for posts you think are important, Wendy. It's not against etiquette, imo. Good post and rec'd!
August 21, 2009 7:02 AM | Reply | Permalink
I'll preface this comment by repeating what I've said in many other threads - a public option is the best means of ensuring competition and controlling costs. It is something to fight for.
Having said that, it's important to point out that bills already proposed, and perhaps one yet to be drafted, would change the system for the better even in the absence of a public option. First, a substitute form of competition - large, regional non-profit cooperatives, will probably be proposed as an alternative. They would not be as effective, but if large enough, could significantly constrain costs; this has already been the experience with some existing co-ops.
Equally important, the proposals envision an insurance Exchange, in which most Americans might eventually find themselves choosing an insurance plan, and which would be the exclusive source of choice for the currently uninsured. This would constitute a huge market, and should attract substantial competition. To accomplish this, it would need to be structured so that insurers offering their services could not do so on a strictly local level, but must compete over large areas of the country or even nationally. This would be expected to prevent de facto monopolization.
Finally, we know from a number of other nations that competition among private insurers can result in a good system, if the insurers are strongly regulated, and if they are not permitted to deny any applicants, charge discriminatory rates for illness or pre-existing conditions, deny legitimate claims from providers, or place limits on annual or lifetime coverages. The Netherlands is one example, and Switzerland utilizes a variant on the theme.
Neither of these societies, which are smaller and less heterogeneous than ours, can serve as a model for U.S. healthcare. Rather, my point is that there are mechanisms for achieving competition among private insurers that do not entail competition with a public insurance plan.
My larger point is that the public option is something that would greatly benefit our society, and it would be a grave disappointment not to include it, but many other provisions in the proposed healthcare reforms would also be valuable.
August 20, 2009 5:42 PM | Reply | Permalink
1. On co-ops see Hacker's point 4. Moreover, it's a half-baked tag that Conrad basically pulled out of his ass a few weeks ago to sink the PO. In short, I call Bullshit.
2. On insurance exchanges without the PO. you say:
"To accomplish this, it would need to be structured so that insurers offering their services could not do so on a strictly local level, but must compete over large areas of the country or even nationally."
So far I agree. But I see no sign this is the case. Do regional insurance and provider monopolies get actively broken up? No. Are providers forced to offer competitive rates to non-incumbents in their region? No. So how does this work out? Regional incumbents get their prefered rates in their district and offer uncompetitive premiums in other incumbents' territory. Everyone's happy... on the supply side. Because without active trust-busting nothing moves. Except profits, which, with a mandate, go through the roof.
Meanwhile the anti-discrimination restrictions ensure that premiums go through the roof as well given the lack of competitive pressure. So I'll call bullshit on that too.
Don't get me wrong, though. If there is a provision breaking up monopolies à la AT&T, I'll be happy to hop on board. But without it this is a catastrophe. Much rather expand Medicaid, open Medicare up to those with pre-conditions, and call it at day.
August 20, 2009 6:29 PM | Reply | Permalink
Do regional insurance and provider monopolies get actively broken up? No. Are providers forced to offer competitive rates to non-incumbents in their region?
Obey - I believe we agree on the great value of a public option, and so my quibbling about achieving private insurer competition in the absenced of a public option is not central to what we should be focusing on. However, I see more of a prospect of fostering such competition than you grant at the moment. The reason for this is that you and I already see this as beneficial (even with a public option and all the more so without it), but Republicans have been proposing similar ideas as well - i.e., expanding insurance availability across state lines. If that is proposed, I believe it would be very popular politically, and it would be hard for opponents to mount a successful campaign against it.
Again, our focus should be on pressing for the public option, and my only reason for raising these other points is to discourage public option proponents from trashing our president and some of our senators for stating that it is not the only valuable element of health care reform. It's all right to denounce the other side, but we shouldn't be too quick to accuse those trying to do their best for us of selling out.
Finally, I believe the strong voices raised in the last few days against dropping a public option have been very valuable to President Obama in providing him leverage in his negotiations with Congress. He can't dictate to them what to do. He has already expended some of his political capital on healthcare reform, resulting in a drop in public approval that weakens him somewhat, he needs our strong voices calling for a public option as a form of wind at his back rather than in his face.
August 20, 2009 9:58 PM | Reply | Permalink
Fred, there is no point in getting into an argument about the merits of Obama. So I'll leave that aside. As long as he is pushing hard for the public option, I'll support him. If he or his supporters can give a credible argument that measures in the bill can achieve the same the same certainty of cost-controls and good business practices, I'll support him. If he starts peddling snake oil in the form of a corporate-subsidy only strategy, I'll get in his face.
You are well-informed, and have provided really useful posts here. But I have seen no argument anywhere that does more than hand-wave towards the efficacy of insurance exchanges as currently conceived without the PO. If you have them, I'd love to see them. You would do a huge service in assuaging the worries of me and my ilk.
Right now, in the individual market, only 60% of insurers' revenue goes to paying for health care. within that 60%, they are overpaying 20-30% for those services. So we will be getting something south of 50% in service value for the money we will be dishing out in the form of subsidies. Will either of these figures improve? No. The pricing power of both insurers and providers actually improves with the introduction of a mandate. They can charge what they want because people will be forced to buy their product. Medicare and Medicaid - with some regional disparities - are significantly better distribution mechanisms, we could be getting 70+% in health care value for the money spent. Crappy, but much better than the present proposal. Expand them 50% or more. This bill, without the PO, is just outrageous.
August 21, 2009 6:56 AM | Reply | Permalink
I don't really have time to get into this in detail now, but the cost consumers pay for health care in our system is affected both by the insurers' desire to remain profitable and the providers'.
The best way to lower the amount charged by providers is to have a large (possibly monopolistic) insurer paying the costs. The larger the insurance company the more leverage it has to drive provider costs down. In our current system, the big insurers get much lower rates from doctors and hospitals than the small insurers because they have such powerful negotiating power. But once insurers are large enough to drive down provider costs, they generally become large enough to act like monopolies and therefore shut down competition from other insurance companies. This means that once insurance companies become large enough to force providers to lower their fees they become resistant to the kind of competition that would force them to lower their own fees. Big insurance companies with few competitors will reduce provider fees but increase their own fees, while small insurance companies with many competitors will reduce their insurance fees, but will not be effective at lowering provider fees.
The public option solves the catch-22, since the government can act as a monopoly and set rates for providers--but as a government monopoly it doesn't seek profits and therefore doesn't need to inflate it's own fees to keep shareholders and executives happy. A single large, highly-regulated non-profit co-op might come close to a public plan (in fact, it would really be almost the same as a public plan), but I doubt it could force providers to accept lower rates as successfully as a government plan could unless the regulations that created it gave it those powers (in which case it would really be a public plan except in name.) Multiple small co-ops I'm afraid do very little to solve the cost problem. They won't get many concessions from providers and even if they have low insurance costs they may still be more expensive than the big insurance companies because they will likely be paying providers much more than the big insurance companies do. Small co-ops aren't a bad thing to have, I guess, but I don't think they'll do much at all to change the status quo.
August 21, 2009 8:28 AM | Reply | Permalink
I don't have the numbers, but I'll go with Hacker's judgment that dominant insurers in a certain market do not in fact negotiate low rates on services, largely because they don't need to and can pass on costs to their own customers. Beyond that, yes, there is a certain catch 22 feel to the problem of having insurers big enough to negotiate forcefully and having insurers small enough so that they can't just pass on costs through pricing power. Thanks.
August 21, 2009 8:57 AM | Reply | Permalink
It's a complicated industry, of course, but the dominant insurers in most major metropolitan regions do negotiate lower rates with providers. That's why in-network care is so much cheaper than out-of-network care. The insurance company has negotiated lower rates with the in-network providers. Remember, most insurers are actually selling their plans to employers, and employers certainly do look for plans that will cost them less. The big companies (the Blues, UHC, Aetna, etc.) are therefore quite motivated to lower what they pay providers because doing so allows them to lower the rates they charge employers and therefore get more business. And believe me, they'd rather lower the fees they charge employers by cutting the amounts they pay to providers than by cutting their own profits, and so they are highly motivated to lower provider reimbursements. The large companies have some leverage in doing this (since they have so many customers that the providers need), but they don't have as much power as the government would.
August 21, 2009 10:30 AM | Reply | Permalink
Okay I'm convinced. Very helpful, thanks purplestate.
August 21, 2009 10:38 AM | Reply | Permalink
Just to help people understand this complex industry a bit better, it's worth noting that most large employers self-insure. This means the employer actually provides all the money to pay claims and maintains a trust to cover those claims. The "insurance" company (Blue Cross, United Healthcare, Aetna, etc.) that employees think they have actually doesn't provide any insurance. Instead, what it provides is administrative support (i.e., managing claims, organizing a network, negotiating with providers, etc.) to the employer for a fee. What the employer looks for when choosing an insurance administrator is an administrator who can provide good service at a low cost. Since the "insurer" is not paying the bills, it doesn't have a direct interest in lowering payments. However, showing that it can reduce payments to providers for employers is one way it can win the administrative business from the employer. Of course, not all employers self-insure, so in other cases, the insurance companies are playing the traditional role of paying claims from their funds and, in those cases, have an even stronger incentive to reduce what they pay to providers.
Now, of course, as long as the insurance company can get employers (or employers' employees) to pay more for the insurance (when the insurer is providing the insurance) or for the administrative services (when the employer self-insures), their interest in seriously lowering provider reimbursements is diluted. But generally, lowering provider reimbursements does help the insurance company, so they do try to do it. And the large insurers are more effective at it than small insurers because providers want access to the large group of customers the large insurance company can offer them.
August 21, 2009 10:56 AM | Reply | Permalink
What is your take on the setup for the insurance exchanges? Can they be made to 'work' in the sense of creating competition in markets currently monopolized by a single insurer and/or provider?
August 21, 2009 11:06 AM | Reply | Permalink
...made to work WITHOUT a public option, that is...
August 21, 2009 11:07 AM | Reply | Permalink
I should say I came to this debate initially thinking that a private-sector solution, if a workable one could be found, would probably be easier to get through congress and maybe might even be more desirable than a public-sector solution given the large burden public health care is sure to place on the taxpayer. But the more I've studied the issue, the more I've come to the conclusion that health care needs to be provided through a public plan. The reality is that to control health care costs someone needs to make decisions about who gets what types of care and how much care. The only way the market can make that decision is by giving care to those who can pay for it and denying it to those who can't. This is completely unacceptable. Only the government has the power to allocate care based on need, not wallet size. The government will have to "ration" care--i.e., prioritize what care is provided to whom and how quickly to keep care affordable for everyone. But it can do that based on likely health outcomes and need rather than by simply giving care to those who have the peronal wealth to pay for it.
Insurance exchanges, co-ops, and all these other "private-sector" solutions do nothing except change the way people purchase coverage. The real issue, though, is changing the way care is allocated. I'm beginning to believe that only the government can do that effectively, and so I'm also beginning to believe that no solution really helps us much except a public solution. I'm not 100% to that conclusion yet--and I'd be glad to be convinced otherwise--but as time goes on and I read about other possibilities, the closer I get to saying: Just nationalize it!
August 21, 2009 11:30 AM | Reply | Permalink
Maybe to give a more direct answer to your question about insurance exchanges, I think the debate so far has placed far too much emphasis on insurance. Finding a new way to purchase insurance (through an exchange or co-op) isn't the answer because the purchase of insurance isn't really the core problem. (Nor is profit-taking by the insurance companies.) The core problem is the underlying cost of medical services themselves. Insurance exchanges don't directly address that underlying problem. At best, they allow me to purchase a marginally cheaper insurance policy. But if medical costs keep rising that won't help me long. We need to find a better way to control medical costs. Newfangled payment schemes for something we still can't afford really are just a waste of time.
August 21, 2009 11:40 AM | Reply | Permalink
My worry with the 'reform' package without the PO really takes things in the wrong direction. Corporate subsidy to have inefficient and poorly incentivized companies provide insurance and care for the poor seems a terrible idea. Especially when government programs can easily be expanded to take care of those who don't have private insurance because they either can't afford it or because insurers don't want them (because of pre-existing conditions, etc). The whole rationale is just so mindnumbingly weird, I don't know what to say. Anyway, many thanks for your input. i'll look out for more of it in future...
August 21, 2009 11:46 AM | Reply | Permalink
I agree totally with you. What's wierd, too, is these new insurance companies they are trying to create scare me more than the biggies that already exist. The big companies do try to maximize their profits, but they are very well known, carefully watched, and while they can be greedy, they also are pretty damn careful to protect their reputations and avoid breaking the law. Little insurance companies can be far more sleazy I think . . . and much more likely to be involved in fraud. Government subsidies for these little fly-by-night companies under the guise of "creating more competition" seems really stupid. This is especially true when the little companies are taking care of people who are old, unemployed, poor, and generally more likely to be vulnerable to scams than the people covered by big employer plans.
And thanks for starting such a good thread.
August 21, 2009 1:55 PM | Reply | Permalink
Thanks for this Obey. Awesome slate link!
August 20, 2009 7:29 PM | Reply | Permalink
Glad you liked it Sal!
August 21, 2009 7:12 AM | Reply | Permalink
I just came across this at firedoglake, Obey. It reveals an interesting timeline about how the debate for health care reform has evolved, or devolved as it were.
This whole thing is between the White House, Congress and its thriving relationship with K street, not Main Street.
http://campaignsilo.firedoglake.com/2009/08/19/the-baucus-caucus-phrma-insurance-hospitals-and-rahm/
August 20, 2009 8:39 PM | Reply | Permalink
FDL is always enlightening. Though I can't say anything there really surprises me. Nor shocks me. This was always going to be a messy process. It just depends on who scares them more - the industry or the progressives...
August 21, 2009 7:21 AM | Reply | Permalink
The largest obstacle to "who scares them more" is that the gov't has to be an honest broker and the industry can tell outright lies. The biggest fears are contrived, Death Panels, less Medicare, losing what they have. I don't know if we can reach thee people who are so emotionally charged by their fears of the demonized Left and their fascist/socialist characterizations. Those are some scary boogeymen.
The issue is very clear to me. Private industry needs to generate profits and grow those profits to be considered successful. They are a business. Public plans need only cover their costs to be successful. They are dedicated to one thing, public service. Government is accountable to all the people. Private insurance is accountable to a relatively few shareholders. In their need to persuade patients of their advantage over their competition, insurers need to pay for marketing. The government does not. So how f^cked up does the government have to be that without the financial demands of marketing and profit, they cannot match the financial efficiency of the private sector? It's a very large margin for the government to have the marketing and profit dollars to waste. I just don't think they can be that inefficient without the public and the politicians reigning it in, eventually. Even the military has had their contracts reduced at one time or another, these recent wars being the exception. But even now they are having their contracts curtailed and I believe it is a matter of time, probably in a post-HCR era, that we will see competition restored for federal contracts. The No-Bid "system" has to be eliminated. We will get there.
August 21, 2009 11:57 AM | Reply | Permalink
I'm far from an ideologue, but after weighing all the arguments and options, I don't see how HCR will solve our broken system without a public option to drive down costs. Privates alone will never reduce costs on their own -- their goal is to INCREASE profits for their investors -- and co-cops are too weak to compete.
Public option is essential.
Good post.
August 20, 2009 10:00 PM | Reply | Permalink
"Co-ops are too weak to compete."
Exactly, and this is the cynical calculation that has been made by our Insurance Industry Masters that has caused them to agree to allow us THAT much health care reform in this "Insurance Industry Profit Enhancement Reform" effort.
And thanks for the firedoglake article. I can remember a time when Congress would at least pretend there was some separation between itself and K Street. Now, they publicly position themselves not to serve their constituents at home, but rather to gain maximum advantage in securing the largesse of their corporate contributors. It isn't even about ideology anymore, but rather what political position will pay the most in the end.
August 20, 2009 10:19 PM | Reply | Permalink
there is no longer the facade of shame with these things anymore.
Maybe there never was and it was just us that presumed there was shame.
Either way, this is a paradigm shift, isn't it?
August 20, 2009 11:23 PM | Reply | Permalink
We have lowered our expectations tremendously. Just look at what the MSM is feeding people, reality TV, the most contrived, hysterical garbage they can create, and the public has come to believe this is "natural" and so hysterics have entered the public debate.
We have lost our respect for education, but that is to be expected when a nation is devolving into fascism. The intelletuals are prime targets because they reveal the scams and they become the problem because they reveal the scam rather then the scam itself being recognized as the problem.
It seems to me that Obama is making sense of this, but his exposure is limited by what he needs to do rather then having time to really encourage people to think dispassionately about the issues.
August 21, 2009 12:02 PM | Reply | Permalink
Why does Medicare spend twice as much per enrollee in McAllen as it does in El Paso? Will the "public option" also?
The "public option" is designed to fix a problem. It is not THE problem.
August 21, 2009 1:25 AM | Reply | Permalink
BS! The current PO-less proposal amounts to the following.
Give the insurance industry 500 Billion, force people to buy their product, HOPE that the industry offers affordable premiums, HOPE that they pay for the medical services they are legally obliged to pay for. The rest is just bow-ties and packaging.
Hope is not a solution for anything.
August 21, 2009 7:36 AM | Reply | Permalink
McAllen has for-profit hospitals and doctors who want to pad their pockets. A lot of the debate so far focuses on the private insurance companies. While those insurers aren't perfect by any means, I think the real culprits are elsewhere. For-profit pharma, for-profit medical technology companies, and increasingly for-profit hospitals and doctors are getting rich off the payments made by Medicare, Medicaid, and private insurance.
Now I have huge respect for most hospitals and most doctors--most of whom are not trying to gouge people and who work tremendously hard, long hours to do wonderful things to help people. But there is a greedy minority (in places like McAllen) that is taking advantage of the system to essentially rob the public--in some of these for-profit "care" facilities, the deal offered really boils down to "your money or your life."
August 22, 2009 10:37 AM | Reply | Permalink
I've gone through the same disheartening process Frog. Thanks for reading.
August 21, 2009 7:26 AM | Reply | Permalink
Thank you for this post. I don't understand why we aren't hearing more of this message. All we hear is "health care is broken" but it's being overshadowed by the lies and fear tactics. We need to hear the facts loudly. How does leaving our health care solely in the hands of profit driven insurance companies serve us the better than having an alternative to compete with it? What are the trends in insurance costs and consolidation? This needs to be out there loud and clear. The weak minded irrational populace will always be easily swayed by fear and lies. Let the rational chew on solid facts and we will get progressive reform.
August 20, 2009 10:37 PM | Reply | Permalink
Strange, isn't it? The press is almost willfully ignoring the glaring facts on this. Kind of dry, true, but simple enough and important enough to a lot of people one should think.
August 21, 2009 9:01 AM | Reply | Permalink
Maybe we need to refer to the private insruance as the company store and use that phrase with all its implications to illustrate how they game is rigged and there are so few alternatives, none of which can really mitigate the trend toward abusive monopolies.
August 21, 2009 12:05 PM | Reply | Permalink
Thanks for this, Obey. I was just reading an article by Greg Saunders at Huffpo about how the public option will kill real health care reform.
Unfortunately, millions will read and watch reports similar to Saunders' and few will see Dr. Hacker's report (at least at Huffpo, Froomkin has a nice piece to balance Saunders' "analysis").
August 21, 2009 12:22 AM | Reply | Permalink
No Don!!! That piece is actually really good. Saunders is basically endorsing Public Option on steroids:
"If I had my way, I'd dump the public option immediately and banish the words "public" and "option" from the vocabularies of any Democratic leaders trying to drum up support for reform. The public option may be uniting the liberal base (which is a very, very good thing), but it has proven toxic for the centrist Democrats whose support is needed to block a Republican filibuster in the Senate (which is a very, very bad thing). In its place, the Democrats should announce a Medicare Consumer Plan will be available on the health care exchanges. The beauty of this approach is that it would seem like a great compromise on the part of progressive Democrats (since most aren't fully aware of the limitations of the public option), but it's much stronger policy-wise and politically :
- Medicare's existing bargaining power could ensure lower costs for consumers while eliminating much of the haggling within Congress about what form a public option would take.
- Expanding Medicare would likely have much lower administrative costs than setting up a whole new public insurance plan from scratch.
- By demonstrating a renewed commitment to Medicare, reformers would help tamp down opposition from seniors
- Conservatives have a much harder time making "devil's in the details" arguments. People don't know what a public option is, but we've had Medicare long enough to know it isn't the second coming of Hitler."
August 21, 2009 7:44 AM | Reply | Permalink
You're right, Obey. Thank you for catching my misreading, and apologies to Mr. Saunders. I must have zoned out by the end of the article. A Medicare for All (who want it) is what many have been saying. Isn't it a shame that we have to disguise or even baldly mislead citizens about what we do in the public interest because these soundbite myths have been created that demonize anything complex (with media complicity). Newsflash, as societies and technology evolve they become more and more complex. I would like to believe that the internet will lead the way in developing a truly informed citizenry but I don't know if the Twitter and MySpace revolution will advance learning all that much.
August 21, 2009 10:01 AM | Reply | Permalink
Well, in this instance I don't think it is misleading. He just thinks the public option is easier to warp into something demonic than a familiar system like Medicare. That's not to say I think the idea is all that brilliant in marketing terms. The GOP and MSM will find a way to demonize anything. So I'd prefer to just go with Public Option, take the lumps, and quit fidgeting with name tags and such.
August 21, 2009 10:18 AM | Reply | Permalink
I'm with you. The Rasmussen poll you link to doesn't seem to reflect a public, all things considered, terrified about a "government takeover." I really think the whole idea of the general public worshiping the free market and terrified of big government (has it ever been bigger than the last eight years?) is exaggerated and what was there has waned. Isn't the Democratic majority a repudiation of that?
Of course, people are all over the place ideologically and fear has always worked well for the reactionaries (even Democrats- 'They're gonna take Grandma's SS away!'), but when it comes to big important issues, it seems like people reflect a bit more in spite of media reinforcement of propaganda.
I always thought that the name, "public option," was a great simple frame and is really all the program is. Who can argue against an optional public offering (Would you like a piece of cake?) as opposed to those big old entitlements, Medicare and Medicaid (weren't they part of the welfare state?), that are a drag on our whole economy?
Anyway, this is a great post because you link to the expert on the [insert brand here] who breaks down the difference between a public option that will work for the public's interest and the rest of the PO in name only proposals.
August 21, 2009 11:25 AM | Reply | Permalink
Extending Medicare is a much better label then public option. It is clear that seniors do not understand that Medicare is socialized medicine. However, they can understand that if we put another 47 million into the pool, the costs will be reduced because of the greater bargaining power. I do not think we can get them to understand in any meaningful way what Medicare is, so let's ignore that part and move ahead showing them how their benefits will increase with more member sof their pool. If they can see that the newly insured at their allies, they will be encouraged to accept them. Right now, they think the insurance companies are their allies forgetting all the casualties in the past, where people lose their coverage, their savings and/or their lives.
August 21, 2009 12:12 PM | Reply | Permalink
Well, Gregor, I know I was thinking in terms of Medicare when I first heard of the government plans that originally seemed to be included only to appease the single-payer crowd. And I like the idea of just extending Medicare, but “public option” as a label doesn’t seem too bad to me. Maybe I'm stuck in the demonized entitlements era.
You may be right that many seniors can be swayed because they’re familiar and comfortable with Medicare (and don’t think of it as socialized health care). Of course, the meme Republicans are pushing- “socialized, government takeover, bureaucrat between you and your doctor play” go back to their Reagan and Milton Friedman market worship and tie in nicely with their fight against the government receivership of insolvent banks (which the law required but even Democrats fought against).
As far as the Saunders article, he is talking about actually extending Medicare, a great idea, but like single-payer, not one that is even on the table. He’s right about the fuzziness of the plans, but that’s true of the rest of the plan’s aspects too. Obama left it to congress so that he wouldn’t get boxed in with a demonized label and so we have the usual sausage-making or three blind men describing a camel or whatever. Most people advocating a “public option” modify the term with “robust” or “strong” meaning a real Medicare type government insurance plan. Anything less is not going to force real reform on the system. Labels are used more to obfuscate than enlighten.
August 21, 2009 2:08 PM | Reply | Permalink
It does seem that we could have framed it better. The Blitzkrieg by the Right caught us off guard, and we're fumbling to get the public back on our side, but really, why ARE we surprised?!!? One thing I think we need to do it remind everyone what the present system has wrought, and get them to admit that they do agree it should be changed. Because right now, the Right has not indicated that they are providing any input to change. So let's hang that recalcitrance around their necks. Most Americans, a large percentage of them, do not like the present system, so why can't we get that little statistic be what eveyrone is discussing instead?
August 21, 2009 5:43 PM | Reply | Permalink
Good question. I think the Dems thought that by bringing the industry in as partners, so to speak, with compromise right off the bat, they wouldn’t get the propaganda barrage that buried the Clinton package. But they didn’t count on the Republicans, largely through the use of the free (Foxified) media (and some well-funded groups that have probably been at the ready for a couple of years now) would rush into the vacuum left by the WH's vague proposals and the Democrat’s ineffective effort to define the debate early on.
Even with all of that, Obey’s poll shows only 34% who support HRC without a public option. The real problem may be, as we’ve seen this last decade, that the people’s voice can be totally ignored if there is some kind of cover laid out beforehand.
August 21, 2009 6:18 PM | Reply | Permalink
The insurance industry has been ready, that's for sure. They didn't make record profits by accident last year. To make more, they just charge more. They have not yet found critical mass, although the country was ready for reform when Obama took office, they have been lulled into complacency. They are so busy seeing guns, they cannot realize that those guys are defeating the best chance they have to see their insurance/healthcare costs reduced. If we do not change it, the only change that will occur are even higher costs, to help recoup the costs of fighting the reform.
August 22, 2009 1:47 AM | Reply | Permalink
Just how hard damn is this to understand?
A benchmark ... a backup ... and a backstop.
~OGD~
August 21, 2009 3:57 AM | Reply | Permalink
Thanks for that OGD!
August 21, 2009 7:49 AM | Reply | Permalink
You generated an excellent discussion, Obey. Good for you. Pound the facts. Some posts have value that go well beyond their 24 hour expiration dates.
TPM should consider a longer term post section, maybe certain posts qualify to graduate from the 24 hour list. Don't know how it would work, but it would make for some longer richer interactive discussions; a greater learning experience.
August 21, 2009 1:20 PM | Reply | Permalink
Except for the public option is only available to the uninsured and employers who offer no medical coverage.
It does nothing for the under insured, those stuck with crappy Health-net type HMOs who deny coverage, deny treatment, limited to $100k in catastrophic health coverage... statistically HMOs deny treatment and try to cancel coverage on those diagnosed with catastrophic illness...
Thus the public option is not available to a much larger percentage of the population who HAVE worthless coverage and end up in financial difficulty and bankruptcy due to fraudulent behavior of the Health Insurance industry...
HMOs main risk analysis tells them with the time value of money, the most profitable method is to deny coverage, let it proceed slowly through the clogged civil court systems and the "customer" will die before the case is resolved.
Thus the lawyers fees in the stalling is much less than paying out the treatment, plus the difference in money between paying lawyers and what is saved NOT paying the claim is still invested for "X" months, the time value of money!!!
Profit maximizing firms are always cost minimizing firms...
The exact reason there is no place for profit in health care.
August 21, 2009 2:40 PM | Reply | Permalink
Yes, I questioned the exclusion of big employers from the exchanges. At least some of the plans have options for them to come in later. But I can see that as a concession to insurers as a guard not to undercut them entirely and too fast. And the remaining group is large. I don't know the numbers of uninsured, small employer workers, privately insured and self-employed but I'm betting (guessing, really) it lands between 60 and 100+ million. I agree with you that we need to start from the position that people's health is not a commodity to be held hostage, but I'll be happy if a move towards public health care that may eventually swamp the system, a hairline crack in the dam, is enacted.
August 21, 2009 3:08 PM | Reply | Permalink