Recently, demands from progressives regarding the public option have changed to include the rhetoric of a "robust" public option.
But does anyone really know what we mean when we call for a "robust" public option? And how in the world will we know it when we see it?
Below I outline the 4 major goals for offering Americans the CHOICE of a public option and how it must be structured if it is to be successful and meet the needs of the American people.
More below the fold:
As the originator of the idea of having a single payer plan compete head to head with private health plans (see AP link below) in a health reform proposal I originally wrote in 2002 for the State of California (see CHOICE link below) , later revised as a national proposal in 2003 for the Robert Wood Johnson Series, Covering America, Volume 3 (See RWJF link below) and brought with me to the Obama campaign in March 2007, I have given this a great deal of thought.
The 4 major goals of giving Americans the CHOICE of a single payer plan or a "public option" operating along side a choice of private health plans are:
- To reduce the administrative costs of delivering medical care, which can be realized in a public plan (like Medicare) compared to the high administrative costs (marketing, profits, pre-authorizations, denials, etc.) in the private for-profit insurance industry.
- To force the private insurers to compete head to head on a level playing field, under the same rules, with the public health plan on both costs and quality, so that the rate of cost increases goes down in both the private and public sectors, and incentives to improve quality increase throughout the system.
- To create enough purchasing power, through the pooling of millions of people in a national Exchange, to be able to negotiate lower prices on pharmaceuticals, medical equipment, and other medical supplies and devices, further reducing the costs of delivering medical care.
And last, but certainly not least,
- To give the American people the CHOICE of under what kind of insurance plan they want to get their health care – a private for-profit health insurance plan OR a public plan like Medicare.
The idea was to bridge the stalemate and divide between the two extremes of the debate that have existed for decades. It was clear that folks who preferred single payer would never be happy with reform that required them to buy insurance from for-profit companies. And it was clear that those who were committed to preservation of the private for-profit health insurance industry would not be happy with anything less than a mandate to purchase private insurance and would fight to the death to kill a single payer proposal.
What the CHOICE proposal did was to let both sides have their cake and eat it, too.
No one would be forced to go into any kind of health insurance they didn’t want.
Under a model of the CHOICE of a public plan, those who prefer single payer or government administered health insurance could choose the public option and those who wanted a choice of private health plans could choose one of the private plans available through the exchange.
Who would have thought, that what seemed to be such a middle of the road COMPROMISE, would result in so much anger, misinformation, and controversy??
Getting back to the point of the diary – How will we know a robust public option when we see it?
The Exchange, and the choice of a public plan within the Exchange, will not be successful unless the risk pool is as big as possible, as quickly as possible.
The only way to get true competition and to begin to control costs is to pool millions of lives and attract a substantial proportion of the population into the new pool where the exchange operates.
President Obama the other night suggested that 5% of Americans will choose the public option under the exchange. This is completely inadequate. In any one market, particularly where just a few for-profit plans control 80-90% of the market, 5% in a public plan is unlikely to change much of ANYTHING. Who are we kidding?
The only way the public plan is going to realize the intended benefits is to open it up to ANYONE who wants in, regardless of what insurance you have now.
Wendell Potter reminded us yesterday that not only do we have a problem with the uninsured, we have a terrible problem with people who are underinsured (meaning their insurance is so lousy that when they get sick, they spend more than 10% of their family’s annual income out-of-pocket on medical care costs).
Tens of millions of American have employer based insurance, but in many instances it is LOUSY health insurance. Many companies now offer only bare bones plans with high deductibles, very high coinsurance and copayments and skimpy benefits. To force these employees and their families to keep their lousy coverage and not give them access to better choices, including the public option, in the exchange, is to fail to address one of the most significant problems with the current system. I repeat, anyone who is unhappy with their coverage should have the right to go into the exchange and choose between private plans and the public option.
In the CHOICE proposal I wrote for California, where anyone who wanted to go into the new pool could, it was estimated that within one year of opening the exchange, 70% of the population would be in the exchange (23 million Californians) and about half of those (11-12 million or 35%) would choose the public plan, with the other half choosing the private. (It was also estimated that 96% of the population would have coverage in one year without a mandate). These estimates were made by the Lewin Group and I think they are low. If we look at the experience of offering managed care plans in Medicare and Medicaid, over time approximately 80% of people, who are given the choice, choose the public option over the private managed care plan. We could expect the same outcome over time under a new national public option and start to truly realize the benefits of a nearly single payer system.
THAT IS COMPETITION. THAT IS CHANGE WE CAN BELIEVE IN. THAT IS A ROBUST PUBLIC PLAN.
To limit those who can elect go into the exchange is to set up, both the exchange and the public plan, for FAILURE. The probability of risk selection in the exchange is high. We need to make sure that there are millions of healthy people in the exchange and in the public plan so that the risks and costs can be spread as broadly as possible.
The larger the pool, the greater the possibility for administrative savings.
The larger the pool, the more purchasing power there is to negotiate on price.
The larger the pool, the more the risk and costs are spread among more people, lowering the costs for everyone.
And the larger the pool, the more competition it provides for the private, for-profit insurance companies.
And it MUST be a national exchange and national public plan option.
To do this at the state level is to create great inequities in our population and we will loose all of the efficiencies we gain by centralizing at the Federal level.
If we want the CHOICE of a public option to SUCCEED, it needs to be open on DAY 1 (and not 5 years from now – next year) to anyone who is not currently covered in a federal program – those with large employer coverage, small employer coverage, individual market, the uninsured, and the underinsured.
THIS would be a "ROBUST" public plan. Anything less will not accomplish our goals.
Please let your representatives, your friends and your neighbors, and write to your local media outlets and let them know what we mean by a robust public option. A public option in a NATIONAL exchange that competes with private health plans and is open to anyone who does not already have public insurance.