The Other Public Options

Now that everyone in politics has concluded that the “public option” is about to be very publicly dropped from health overhaul legislation, perhaps it is time that everyone understands that the public options we already have are working very well.

The upside-down logic of this retreat makes about as much sense as irate Medicare beneficiaries who turn out to protest “government-run health care” while insisting that their own government insurance remain untouched. In our current public discourse, no absurdity is too ridiculous to be called farce.

Yet there are still facts that can get in the way of fictions, as the Census Bureau’s recently released annual report on income, poverty and health insurance coverage reveals. That there is so much bad news, and so much more to come, is taken for granted. Conveniently overlooked is the good news: Government programs that shield the elderly and the poorest among us from economic catastrophe are working precisely as they are supposed to.

The report is a bleak compendium of information on the early impact of the economic downturn on American families. Median income is down — by 3.6 percent, a figure that doesn’t reflect the continuing toll from increasing unemployment as the recession grinds on. Poverty is up. So is the number of people who are without health insurance.

The number of uninsured climbed by 682,000 in 2008, another figure that is sure to rise as the impact of job losses and benefit cuts in 2009 is felt. There are 6.6 million more Americans without insurance now than there were in 2001, at the bottom of the last recession, according to the Center on Budget and Policy Priorities.

The number of uninsured would have been far higher had there not been an increase in coverage through Medicaid and Medicare. While private health policies continued to decline, Medicare and Medicaid enrollment rose, and these programs now insure 29 percent of Americans. The recent expansions of Medicaid to cover more children have been particularly effective. “The uninsured rate and the number of uninsured for children are the lowest since 1987,” the Census Bureau says.

Those on the opposite end of the age spectrum also have been spared the worst of the recession. People 65 and over were shielded from the drops in income that fell on the working-age population — as a group, income among the elderly was unchanged. The reason, of course, is Social Security. (The report does not measure the decline in wealth or real estate values that have diminished the net worth of some older Americans.) Since Medicare is a universal, guaranteed plan for everyone 65 and over, the elderly have been able to keep their health coverage as well.

The government has safeguarded the weakest in society from the worst of our economy’s failures. It has done so through government-funded (but not government-run) health insurance that relies on private doctors and hospitals to deliver care and, in Medicare particularly, offers a wide choice of providers. Its cost is high. But the growth in Medicare spending per patient has been slower in recent years than the growth in per-patient spending in the private insurance market.

Those who complain that Medicare is “bankrupt” conveniently forget that the Medicare payroll tax rate has been frozen since 1985. The last infusion of new tax revenue into the program came in 1994, when the cap on the amount of income subject to the payroll tax was raised. So the future fiscal imbalance in Medicare is caused partly by our unwillingness to adequately fund it. What private insurer has refused to raise its prices in 15 years?

Truth is almost always a casualty of politics, more so when fear is the tactic used to obscure the facts. The Massachusetts state insurance program is the model for President Barack Obama’s approach, and is a template once hailed by Republicans as a victory for “choice” and private insurance. Yet more than half of the newly insured get their coverage from the two “public options” that were made available, according to the Kaiser Commission on Medicaid and the Uninsured.

We know what can work. Yet the shrillest voices and the most entrenched special interests are insisting that Congress jettison a public insurance option in health overhaul in favor of untested private insurance “co-ops.”

If they fail, there will be more disillusion and anger. And, we can only hope, electoral punishment for those responsible.

Marie Cocco’s e-mail address is mariecocco(at)washpost.com.

© 2009, Washington Post Writers Group