The public insurance option and AHIP's battle against it
The Case For Public Plan Choice In National Health Reform
By Jacob S. Hacker, Ph.D.
Berkeley Law Center on Health, Economic, and Family Security
December 16, 2008
This brief has made three main points. First, public health insurance outperforms private insurance in controlling costs while maintaining access and benefits—even when compared with private plans that are regulated to ensure broad coverage. Second, public insurance has also made major strides in quality improvement, and a new public plan working with Medicare alongside private plans would be able to make much greater strides in the future. Third, a competing public plan is essential to set a benchmark for private plans, providing a “check and balance” that ensures private plans, as well as the public plan, uphold high standards.
Even within a reformed system, private plans will continue to have incentives to engage in activities that undermine health security, such as tailoring their benefits or provider networks to discourage less healthy people from enrolling. Moreover, acting alone, private plans have historically paid insufficient attention to obtaining greater value. This is in part because of their limited reach, inherent instability, and the frequent movement of patients in and out of their subscriber base, and in part because of their generally weak incentives to invest in broadly distributed information on quality or to share their performance data with other interested parties. Public plan choice creates an institutional “check and balance,” encouraging private plans to uphold high standards of quality, affordability, and access.
The Case For Public Plan Choice In National Health Reform (27 pages):
http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf
Key Findings (2 pages):
http://institute.ourfuture.org/files/Hacker_Keyfindings.pdf
And…
Insurers Seek Presence at Health Care Sessions
By Robert Pear
The New York Times
December 17, 2008
When supporters of President-elect Barack Obama hold house parties to discuss ways of fixing the health care system over the next two weeks, they may find some unexpected guests.
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the main lobby for insurance companies, said the group was “mobilizing our grass-roots coalitions and encouraging industry employees” to participate in meetings for the Obama transition team.
Before Mr. Obama even takes office, insurance companies are raising questions about a central element of his plan that calls for creation of a new public insurance program to compete directly with private insurers. A public program would, they fear, have inherent unfair advantages.
Comment:
By Don McCanne, MD
In this window of opportunity for health care reform, the model that has gained traction and is moving forward is reform based on a combination of employer-sponsored plans, an individual mandate to purchase regulated private plans through an insurance pool or insurance exchange, and an option to purchase a public plan based on an improved version of Medicare.
The private insurance industry knows that if it is to survive, it must be willing to accept everyone in both the employer-sponsored and individual markets, and they now have expressed a willingness to do so. They support a market of competing health plans, with one exception. They oppose the creation of a new competing public program because it would have “inherent unfair advantages.”
What are those advantages? Jacob Hacker, in “The Case For Public Plan Choice In National Health Reform,” explains the many reasons why a public plan is superior to the private plans in providing greater value through higher quality, better access, and greater effectiveness in controlling costs. He states that, by establishing a level playing field, the public plan option would set a benchmark as a standard for private plan performance.
The private plans profess to believe in market competition. Why should they object to a level playing field? Read this paper and you’ll find twenty pages of reasons on why they cannot compete with a public program.
So we’re once again back to the argument that we cannot go straight to a single payer national health program because it is not politically feasible. But what about the feasibility of a public option in a multi-payer system? The insurance industry is opposed because the government has “unfair advantages.” The Republicans say that they are cooperating on a bipartisan approach to reform, but once the doors close, they have made it very clear that a public option will never be approved. Hacker tells us why the public option is absolutely essential in the multi-payer model, but AHIP and the Republicans tell us that it will never happen (and they have the Senate votes to prevent it).
This report is well worth downloading since it explains so well why we need to change to a public insurance program. With minimal editing, such as removing comments about competing private plan innovation, we could use it as a treatise for a new and improved Medicare - a single payer national health program.
The HCAN coalition could use the unedited version to advocate for the multi-payer model, and we could use the edited version to advocate for single payer. Since neither approach is “feasible,” why don’t we just go for broke? To Medicare for All in one single leap!