by William Teach | October 28, 2016 6:47 am
Another day, another call from a liberal for a public option to try and save the utterly failing Obamacare. Elsewhere in the NY Times, Excitable Paul Krugman, who certainly does not purchase his own health insurance via the Obamacare exchanges, says that the recently releases premium hikes and insurers bolting the exchanges is just a “pothole,”, so, no big deal. Then we have Jacob S. Hacker, a Yale professor who wrote “American Amnesia: How the war on government led us to forget what made America prosper.” Without even looking at the book, I’m guessing he thinks government made America great. Looking at Amazon, yup, Government great.
Now we get
The Best Way to Save Obamacare
The Affordable Care Act has faced a rocky six months. First, major national insurers scaled back their participation, leaving about one in five people buying coverage through health exchanges with only one plan to choose from. Then this week, the Obama administration announced that exchange plans would post an average premium increase of more than 20 percent (though most enrollees would be insulated from the full increase by subsidies for their coverage).
As someone involved in the debate over the Affordable Care Act from the start, I don’t find these unhappy events all that surprising. From the outset, I’ve argued that without a public option — a Medicare-like plan that would be available to all Americans buying health insurance — insurance competition would dwindle and premiums would skyrocket. Now that they have, it’s time to do now what we should have done then: take the simplest route to a more stable and affordable health care system.
Because Government does a wonderful job with so many of its other ventures.
Critics of the public option are convinced it’s a one-way ticket to single payer (the government alone provides coverage). History suggests the opposite: The public option isn’t a threat to a system of broad coverage through competing private plans. Instead, it’s absolutely critical to making such a system work.
Got that? The health system, which worked for hundreds of years, needs the Helpful Hand of Government to work correctly.
We’re already heading toward single payer in sections of the nation — only it’s a private plan doing the paying. Next year, five states will have only one insurer in their exchanges, the online marketplaces set up to allow uninsured Americans to buy subsidized coverage. Nine more states will have just two insurers.
Of course, out on the private insurance market, there are plenty that offer health insurance. They just don’t want to participate in Obamacare anymore.
These problems are what motivated proposals for a public option in the first place. Major parts of the country lacked enough insurer competition to keep costs in line, especially with rapidly consolidating providers. And the proposed alternatives to a public option, like the insurance “co-ops” eventually included in the 2010 law, did not have the bargaining power and reach that a Medicare-like plan would have (and most of them have since gone out of business).
Except, it was Government that was restricting competition, and we weren’t seeing the types of premium rise that we see with Ocare, nor were deductibles set so high that for many they might as well not have insurance. And medical facilities participated, rather than opting out.
The argument by public-option supporters wasn’t that it would or should replace private insurance. It was that having a public plan as a benchmark and backup was essential to make competition among private plans work.
A public option would certainly offer such low prices, all on the backs of taxpayers, that even more insurers would abandon the system. That’s not competition, that’s China dumping insanely low priced materials into the economy, shutting out US manufacturers.
Having a public plan alongside private plans won’t merely ensure that everyone has a choice. It will also pull more people into the system, creating a broader pool for all the plans.
The private plans would whither away, and make more people dependent on Government.
The biggest advantage of the public plan, however, is its greater ability to restrain prices. As rapidly as the insurance market is concentrating, medical providers are consolidating faster, driving up prices and creating huge differentials even within regions. Medicare hospital reimbursements vary much less — and they’re typically much lower.
In other words, Government could drive private insurance out of business. Fewer and fewer doctors and hospitals and medical providers take new Medicare patients, because they aren’t in business to lose money. And, don’t forget about all the companies that offer supplements to Medicare, due to coverage gaps. You see their TV commercials all the time.
Hacker also pimps the notion that a public option would reduce the deficit by tens of millions of dollars a year. We’ve heard that promise before, in everything from Ocare to other government programs. Never happens.
If things keep going as they are, Americans are certain to demand greater regulation of private plans to make them operate more like public plans. Instead, we should make them compete with a public option.
And, as said public option causes even more problems, they’ll call for single payer. That’s what they do.
Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.
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