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.
