Samuelson: Public option 'mirage'

Rick Moran
Those of us who oppose Obamacare's "public option" insurance plan may be advocating the wrong reasons for doing so, says columnist Robert Samuelson in the Washington Post.

While pointing up some of the obvious drawbacks, the real downer for the public option is that those who believe in its stated benefits - or posit dire consequences from its passage - are looking at a mirage:

The promise of the public plan is a mirage. Its political brilliance is to use free-market rhetoric (more "choice" and "competition") to expand government power. But why would a plan tied to Medicare control health spending, when Medicare hasn't? From 1970 to 2007, Medicare spending per beneficiary rose 9.2 percent annually compared to the 10.4 percent of private insurers -- and the small difference partly reflects cost shifting. Congress periodically improves Medicare benefits, and there's a limit to how much squeezing reimbursement rates can check costs. Doctors and hospitals already complain that low payments limit services or discourage physicians from taking Medicare patients.Even Hacker concedes that without reimbursement rates close to Medicare's, the public plan would founder. If it had to "negotiate rates directly with providers" -- do what private insurers do -- the public plan could have "a very hard time" making inroads, he writes. Hacker opposes such weakened versions of the public plan.

By contrast, a favored public plan would probably doom today's private insurance. Although some congressional proposals limit enrollment eligibility in the public plan, pressures to liberalize would be overwhelming. Why should only some under-65 Americans enjoy lower premiums? In one study that assumed widespread eligibility, the Lewin Group estimated that 103 million people -- half the number with private insurance -- would switch to the public plan. Private insurance might become a specialty product.

This is why the liberals want to go "all in" on the public option. The artificially low premiums - subsidized by taxpayers - would eventually force private insurers to the sidelines where only the wealthy could afford the coverage. The rest of us would be stuck with lower quality care, less of it, and ever expanding taxpayer subsidies as the cost of health care continued upwards.

Samuelson calls for an honest debate on these consequences. He is dreaming. Democrats want these consequences to come to pass which is why they are pushing so hard for the public option in the first place.

 

Hat Tip: Ed Lasky




Those of us who oppose Obamacare's "public option" insurance plan may be advocating the wrong reasons for doing so, says columnist Robert Samuelson in the Washington Post.

While pointing up some of the obvious drawbacks, the real downer for the public option is that those who believe in its stated benefits - or posit dire consequences from its passage - are looking at a mirage:

The promise of the public plan is a mirage. Its political brilliance is to use free-market rhetoric (more "choice" and "competition") to expand government power. But why would a plan tied to Medicare control health spending, when Medicare hasn't? From 1970 to 2007, Medicare spending per beneficiary rose 9.2 percent annually compared to the 10.4 percent of private insurers -- and the small difference partly reflects cost shifting. Congress periodically improves Medicare benefits, and there's a limit to how much squeezing reimbursement rates can check costs. Doctors and hospitals already complain that low payments limit services or discourage physicians from taking Medicare patients.

Even Hacker concedes that without reimbursement rates close to Medicare's, the public plan would founder. If it had to "negotiate rates directly with providers" -- do what private insurers do -- the public plan could have "a very hard time" making inroads, he writes. Hacker opposes such weakened versions of the public plan.

By contrast, a favored public plan would probably doom today's private insurance. Although some congressional proposals limit enrollment eligibility in the public plan, pressures to liberalize would be overwhelming. Why should only some under-65 Americans enjoy lower premiums? In one study that assumed widespread eligibility, the Lewin Group estimated that 103 million people -- half the number with private insurance -- would switch to the public plan. Private insurance might become a specialty product.

This is why the liberals want to go "all in" on the public option. The artificially low premiums - subsidized by taxpayers - would eventually force private insurers to the sidelines where only the wealthy could afford the coverage. The rest of us would be stuck with lower quality care, less of it, and ever expanding taxpayer subsidies as the cost of health care continued upwards.

Samuelson calls for an honest debate on these consequences. He is dreaming. Democrats want these consequences to come to pass which is why they are pushing so hard for the public option in the first place.

 

Hat Tip: Ed Lasky