One issue I have with the three Democratic proposals is giving patients the option of a government-run, Medicare-style plan. To be frank, this is the single troubling aspect that is preventing me from being enthusiastic for any of the Democratic proposals. By using the government’s bargaining power, they can undercut premiums from private plans, leading to a catastrophic Medicare-for-all scenario. A universal Medicare is no different from having a single, giant HMO calling all the shots. It doesn’t matter whether the bureaucrat saying “no” is from the government or a private insurer.
Besides, I have my doubts about how such a Medicare option would compete. True, premiums would likely be lower, but at what cost? Are drug formularies going to be restricted, like the VA? Will there be more pre-certification hoops to jump through, as there are currently with Medicare? We may deal with these issues with private insurances, but Medicare may take it to another level – look no further than the NHS. If the government option is stripped-down in any way or form, I highly doubt that today’s “have it all”-conditioned patient will accept it.
The LA Times writes about one thing that I didn’t think of – the government option could be used as a “dumping ground” for the sickest patients:
Government coverage “could become the fallback plan for sick people,” said health economist Jack Rodgers of the consulting firm PricewaterhouseCoopers. “If you end up with a federal plan that has a lot of sick people in it, is that something that you would want the federal government to subsidize, or would it be doomed?”Most healthcare costs are incurred by the sickest patients. In any given year, about 10% of the population accounts for more than 60% of healthcare costs — a phenomenon that partly explains why insurers go to great lengths to avoid issuing policies to people with medical problems . . .
. . . But what if those patients — weary of dealing with private insurers — sought out the government plan as a haven? Rules for insurers might not protect the government plan in such a situation. Instead, lawmakers might have to wade into the complex business of trying to adjust premiums between the government plan and the private policies.
That is a very real possibility that may doom this idea entirely. Let’s hope so.
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{ 12 comments }
So what, exactly, do you think *would* work?
I mean, at some point we have to stop bitching and wringing our hands, and start offering some constructive solutions.
I don’t really understand the assumption that a public option would be used as a dumping ground, unless we mean a dumping ground for private insurers. If private insurance really is better, and if–as in all three democratic plans–there are guarantee issue requirements in the private market, then the only reason to assume that a public option would be a haven for sick people is that private insurers will figure out ways to collect premiums from healthy people and then foist the costs of paying for sick people onto taxpayers.
Granted, AHIP, etc. has proven time and again that they want to do just that. But that’s more of an argument for single payer health care…
So, tell me, what am I missing? Why, under public-private competition with guarantee issue, would sick people flock to the public option if it’s inferior?
You must not have read the details on the publicly-run plans (which, in fairness, are a little hard to find). In short, the publicly run plans are NOT like medicare, but rather more closely resemble the FEHBP. Medicare does not negotiate — it simply sets the prices it will pay and doctors can take it or not. If that were the proposal, it would indeed be problematic.
The FEHBP, however, contracts with a variety of privately-run networks to administer the plan, which is funded by the premiums the insureds pay. Employees may choose from a variety of networks. Thus, there is no single 800-lb gorilla negotiating down prices. And the plans need to maintain their networks, so they do need to keep provider compensation competitive.
So *if* premiums were to be lower than privately-run programs, then it would either have to be from administrative efficiencies or a lower benefit level.
I love the idea — it basically lets the market decide. If the plans and prices offered by the government are not competitive, it will not be successful. OTOH, if it is well-implemented, consumers will flock to it.
As for patient dumping — that will only be the case if it is allowed. A key element of any reform plan is community rating/guaranteed issue. if adverse selection is illegal, then there’s no reason that the public pool should be any more expensive than the private pool.
There are in many states public insurance plans which serve as the ‘insurer of last report.’ they are usually for those not employed by a large company who have health care problems. the premiums tend to be prohibitive for most, and so they are little utilized. We do not need to recreate this on a national scale, and definitely do not want to subsidize it!
I’m with the other two commentators. Go to Commonwealth Fund and take a look at their data. First of all, our current system comes in dead last for twice the cost of health care in our peer countries. Doctors in those countries express greater satisfaction, as do patients. No system is going to be perfect — you can obviously find fault with any system, and that’s why you take objective criteria as does the Commonwealth Fund or the American College of Physicians in order to see a bit more clearly what is better in this imperfect world.
Our current system? With 47 million uninsured and more than that number underinsured, millions of medically caused bankruptcies crippling families, businesses strangled as they try to compete globally with businesses from countries where health costs are far below ours — backwards countries like France, for instance, where they do face transplants and are equal to us in outcomes.
I too think that we have about as much chance of regulating private insurance companies as we do of regulating the Mafia, and that the public insurance program will become a dumping ground for the sickest. We’ll continue to pay far more than citizens of other countries for health care, because we’re making the decisions based on fear and prejudice (and propaganda), rather than thinking rationally.
A Denver politician told me earlier this month that as he was canvassing homes in his district, drumming up support for the November election, he talked with a couple physicians, husband and wife. They’re getting out, sick of dealing with insurance companies, sick of the injustice that’s taken over what was once closer to a calling, a ministry, rather than a profit-driven, bottom-line enterprise.
What kind of people are we, Kevin M.D.? What kind of health care system is your ideal system?
Ave Cassandra
“Our current system? With 47 million uninsured and more than that number underinsured, millions of medically caused bankruptcies crippling families, businesses strangled as they try to compete globally with businesses from countries where health costs are far below ours — backwards countries like France, for instance, where they do face transplants and are equal to us in outcomes.”
Oh PLEASE!. MILLIONS of medically caused bankruptcies??
Is this the same France where about 14,000 citizens died during a heat wave a few summers ago? I’ll just BET the physician satisfaction is great there. Nothing beats attending to the sufferers of heat stroke like hanging out on the Mediterranean with all the other healthier Frenchmen in August.
Isn’t Medicare already a dumping ground for the sickest?
Don’t all dialysis patients qualify for Medicare? Disabled cancer patients?
While those who receive income from patients might envision monopoly paying power, those receiving care might envision effective standards, which an economist might think of cost effective treatments.
Too many operate under the assumption that their is “a fix”. A dose of reality–if you can swallow it:
All those European systems are in financial trouble also and are in crisis–as is Canada.
As people get more money, they spend a larger part of it on healthcare because they want to. So we are going to continue to have escalating healthcare costs as long as we have personal choice, a growing economy, and our optimistic belief in technology.
As is indicated by the universality of financial strain in all sorts of “systems”, the problem is far more fundamental than the details of a particular system–it is that our science and technology have developed ways of treating disease and enhancing life that outstrip the productive capacity of the less productive sectors of the economy. The average person in average health can consume more healthcare trying to stay healthy than surplus wealth they produce beyond other “needs”.
More and better healthcare isn’t going to save money. Denying healthcare and letting the sick die saves money. Everyone kept healthy today is someone who will live to get sick later. The cheapest system in Eurasia now is the Russian one–little money spent on it and declining life expectancies–and it saves a mint on the state pension scheme also.
If any prediction any policy wonk makes about how any plan will save money or will cost x amount turns out to be even close to accurate —it will be the first time in the history of governmental involvement in healthcare that it has happened.
No nation is equal to the US in outcomes for sick people–only in outcomes for population, which is an apples and oranges comparison as they don’t have the social factors fueling disease that we have.
No government run system is going to be efficient and effective. It has never happened and never will.
No insurance system is going to work well for the chronically ill. To even try is an oxymoron. Insurance spreads out the risk for unlikely events that haven’t happened. You can’t insure a building that is already on fire–especially one that you know is going to keep burning even as you try to rebuild it. Insurance is all about risk–and doesn’t work when the risk is already 100%.
About 1/3 of the uninsured are illegal aliens. A government that intends to deport them if it finds them can’t cover them with insurance. You can’t “fix” that until you fix immigration.
About 1/3 of the uninsured can afford insurance but don’t want it. You can’t “fix” that without further erroding our dwindling personal liberty.
Many of the rest are uninsured for a few months between jobs because they can’t or won’t pay cobra rates.
The real problem consists of a few million people who are uninsured because preexisting conditions make them uninsurable. Do you want to upset the whole apple cart over few apples? Wouldn’t targeted efforts to that tiny proportion of the population make more sense?
BTW, physicians give away about 14% of their services–which is about the percentage of the population that is uninsured–interesting.
But in the final analysis, being sick sucks and is still going to suck no matter what you do. Life hurts and you can’t change that and it isn’t fair and you can’t change that either. You have to get sick and die one day–but you don’t have to do it fighting a beurocracy and you don’t have to live a serf or a slave.
Another unpleasant fact: This nation is broke and living off it’s credit cards. There is nothing in the constitution that empowers or charges the federal government to tend the sick and if we want that from our government, we should go to our states and pay as we go. It is time for us to stop eating our young.
anon 7:11,
Very lucidly and accurateley said. “Fixing healthcare” and the promotion of medical care entitlement is going to destroy out country
“So, tell me, what am I missing? Why, under public-private competition with guarantee issue, would sick people flock to the public option if it’s inferior?”
Uhh, the fact that its “free” makes all the difference in the world. Besides, studies have shown that patients really dont know what constitutes “good” healthcare to begin with. A “free” govt system will siphon off just about everybody except the upper middle class and rich folks.
As a Canadian HCP, I will admit that there are problems with our system, but I would hardly call it a ‘crisis’ situation. I agree that our system likely would not work in the US.
On a very basic level, if you add in a layer to any system whose sole purpose is to make money (i.e. insurance companies), then yes, your system is going to cost more – the profits. Imagine if all of those profits were available to treat the uninsured or under-insured?
“Uhh, the fact that its “free” makes all the difference in the world. Besides, studies have shown that patients really dont know what constitutes “good” healthcare to begin with. A “free” govt system will siphon off just about everybody except the upper middle class and rich folks.”
Except, of course, democratic proposals don’t have a free public option. They have subsidized public options and subsidized private options that compete with each other.
Also, if, as you claim “studies have shown that patients really don’t know what constitutes good healthcare,” we should just scrap the whole concept of the private market and enact one big government program, since a private market is really premised on the idea that most people are capable of making decisions.
Anonymous says “Oh PLEASE!. MILLIONS of medically caused bankruptcies??”
Well, yeah. Millions of bankruptcies caused by illness or accidents. Makes you proud to be an American, huh?
Medical Bills Leading Cause of Bankruptcy, Harvard Study Finds
February 3, 2005
“Illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001, according to a study published by the journal Health Affairs.
“The study estimates that medical bankruptcies affect about 2 million Americans annually — counting debtors and their dependents, including about 700,000 children.
“Surprisingly, most of those bankrupted by illness had health insurance. More than three-quarters were insured at the start of the bankrupting illness. However, 38 percent had lost coverage at least temporarily by the time they filed for bankruptcy.”
Ave Cassandra
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