Why this private health insurance CEO is against a public plan

It’s not because of what you think.

The common thought is that health insurers will quiver at the sight of a government plan, with the public option offering lower premiums to patients due to leaner administrative burdens.

But Charlie Baker, CEO of Massachusetts’ Harvard Pilgrim Health Care, isn’t so worried about that. Instead, he first wonders about the government’s competence in handling another large bureaucratic program:

I worry less about the impact of having the federal government writing the rules and competing directly with plans like Harvard Pilgrim for business, and more about the federal government’s ability to do this at all, much less do it well. Merely coordinating basic demographic information between Social Security, Medicare and Medicaid – three big federal programs that millions of Americans belong to – can be a chore for beneficiaries, their children, and their health plans. It’s not unusual for our members to spend six months or so trying to get this stuff corrected before they call us and ask us to step in on their behalf.

And next, he has zero confidence that the government will be fiscally disciplined administering such a plan. With how it handled the General Motors fiasco as an example, Mr. Baker wonders how any proposed public plan “will negotiate with providers for a mutually agreeable fee . . . will balance its books every year . . . will have to cover its costs of doing business – just like the private plans do – [but] won’t add to the federal deficit.”

Is that even possible?

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