By Marie Cocco
The summer of disinformation seems to have accomplished its goal: to preserve for the private insurance industry an effective monopoly over how much most Americans pay for health care, and on what terms they can buy it.
No one will come out and say this. But that will be the result if the so-called public option is dropped from the proposed menu of choices in a new health “exchange” envisioned in reform proposals being considered on Capitol Hill.
It was predictable that the right wing would declare a voluntary public option a scary “government takeover” of health care. That’s what they always say. Only a few years ago, the same crowd was in a full-throated roar about how government-guaranteed Social Security benefits had to be turned into private investment accounts. They claimed—with perfectly straight faces—that we’d all do better if we retired on our Wall Street riches.
Does anyone still believe that?
It’s one thing to say the right wing is low on the believability scale and quite another to claim that those who favor a public option in health care are left-wing crazies who cling to it for ideological comfort. But this is what several otherwise level-headed media commentators have suggested lately, and worse, it’s what an anonymous White House adviser told The Washington Post when he expressed annoyance that the “left of the left has decided that this is their Waterloo.”
The “left of the left” doesn’t want the type of public option currently under discussion. It wants a national, single-payer health care system modeled on Medicare. But the “left of the left” has essentially been told to shut up about a single-payer health plan because it isn’t politically feasible.
The public option already is a watered-down compromise. And it’s screwy to suggest that it’s supported only as a tenet of ideological faith. It’s actually supported by a common-sense look at what the military might call the facts on the ground.
Right now, the private insurance industry operates regional monopolies in which employers, individual consumers, doctors and other medical providers have virtually no option but to deal with one or two big insurers. The American Medical Association has estimated that 94 percent of commercial markets for health insurance are “highly concentrated” according to federal antitrust guidelines. While the insurance industry takes issue with the AMA’s findings, they’re supported by independent research, and they’re not new: A 2004 study in the peer-reviewed journal Health Affairs found similar market dominance.
In this environment, a public option that would have government support—and the reach of its purchasing power—is the only effective competitor. No politician who promotes the alternative of nonprofit cooperatives has said how these start-ups could gain the clout to compete against industry behemoths, or compel doctors, hospitals and other medical providers to offer them discounts for a small share of local patients.
An insurer without a network of providers would soon be out of business. Individuals who purchased that plan would be left where they started—at the mercy of the big, for-profit companies. In contrast, enrollees in a nationwide public plan could be sure their insurer wouldn’t disappear.
The national scope of a public plan also makes it the most powerful means of driving down costs, an achievement that private insurers have long promised and never delivered. One reason the Congressional Budget Office refuses to count theoretical federal budget savings from some proposed private industry reforms is just that—they’re theoretical. Meanwhile, specific changes to government payment practices not only are counted, but they have a track record in Medicare of holding down costs per beneficiary better than the private market.
The Commonwealth Fund, an independent health care think tank, examined the models currently competing for congressional support and found that a public plan with payments set in accordance with Medicare rates would save the federal government, employers and individuals the most by far. The savings were three times greater than those achieved with competition only among private plans. Even a modified version of a public plan with provider payment rates pegged somewhat above what Medicare pays produced greater savings.
Nonetheless, what is emerging from Congress is a health overhaul that isn’t as cost-effective as it could be and doesn’t guarantee against lost coverage—yet gives insurers millions of new customers whose purchases will be subsidized by taxpayers.
This is change the industry can believe in.
Marie Cocco’s e-mail address is mariecocco(at)washpost.com.
© 2009, Washington Post Writers Group