CE Week #5: “Public option critical to reducing health costs” Oct. 1st
By Chris Jordan
October 1, 2009
As UW students flock back to school this week, their representatives in Congress will have recently flocked back to their D.C. offices after an August recess marked by angry town halls and endless health-care ad wars.
President Barack Obama’s signature domestic agenda item has faced a tough road, and no doubt his own strategy and execution is partly to blame. By failing to explain what health-care reform means to those who already possess insurance, the President left a vague plan open to attack.
Such Republican scare tactics and outright lies (see “death panels”) have unfortunately had an impact. They’ve inflamed the passions of anti-Obama activists on the right and sewn doubt in the minds of many Americans about health insurance reform.
The key sticking point in this debate has been the inclusion of a government run “public option” that would compete with private health insurance. While support has declined for the Democratic plan in general, a CBS poll in September showed support for a public option strong at 68 percent. Another poll published in September found that 73 percent of doctors support the public option.
Republicans have used confusion over this proposal to paint the entire reform effort as a “government takeover.” They have constantly claimed that Americans will be forced from their private insurance into a “big government plan.”
I find this to be a strange argument because, as I understand it, you can’t be forced into something that is by definition an option.
The public option is intended to provide competition to private insurance by giving Americans more choices. If people choose to abandon their private insurance for a public option, it’ll be because they make the decision that they can get better care at a lower cost with that plan. It won’t be because the evil, socialist government forced them to do it.
We can all agree that the goals of health reform should be to lower overall costs and increase the quality of care. We can also agree on the general principle that more choice for consumers and competition in the marketplace leads to both lower costs and an increased quality of the product being sold. That’s what the public plan will do; provide another choice to consumers and force private insurers to compete.
For those who suggest that the public option would drive private insurers out of business, the Congressional Budget Office estimates that only 11 to 12 million people will sign up for it. Not to mention the fact that reform will require everyone to have insurance, similar to the way everyone is required to have auto insurance. With roughly 45 million Americans currently lacking any plan, private insurance companies will be signing up new customers faster than they can take them.
And for those who suggest that the public option would be too costly, the President has said that it must be self-sustaining and funded by those who pay to use it.
We should set up a health-care system that is uniquely American; one that combines the best aspects of our own system (high quality care, innovation) with the best of other systems (universal coverage, lower cost). That’s why Obama is not proposing a government takeover, he’s proposing a government option that will pay for itself and provide more health insurance choices, and thus competition.
If the public option does not survive into the final bill, we will have lost a great tool for controlling health-care costs.
Reach columnist Chris Jordan at opinion@dailyuw.com.
I can see why some people are not fans of the “public option,” especially knowing that the government will somehow interfere with private health care insurance. If more people ending up with a sort of government run insurance, the private insurance businesses will weaken, and as a result, make many people unemployed. This is not a good outlook considering the state our economy is in now.
“I find this to be a strange argument because, as I understand it, you can’t be forced into something that is by definition an option.” The American people need to see the best option for themselves, and what works according to their lifestyle. If a full family with two unemployed parents has no alternative than the public option, then that is what they should look at. However, if other people already have a good plan with private insurance, they should continue with it instead of switching over. The more people become aware, the better the outcome.
Approximately how many millions of Americans need to sign up for the public option in order for it to work correctly or efficiently? According to the Congressional Budget Office, an estimated eleven to twelve million will sign up, but is there a certain number it needs to attain?
Chris, I respectfully disagree and here is why.
First, the “republican” scare tactics of these so called death panels is a legitimate concern. (see your other article I went in depth on how and why)
President Obama has repeated the claim “under new health care legislation, if you like what you now have, you will get to keep it.” http://abcnews.go.com/Politics/Health/story?id=7841918&page=1 you admit that Obama has said this in your article. However, the new US Health Care legislation is likely to resulting in requiring change of providers.
Under HR 3200 (the Pelosi House Billhttp://www.opencongress.org/bill/111-h3200/text
a government option is proposed, priced at 20% below insurance competition. The low rates are justified by simply cutting the reimbursement to providers. Under the legislation, small businesses can drop their existing health care and instead pay a fine of 8.5%. Estimates of the number who will lose existing coverage by this mechanism range up to 121 million people. The Heritage Foundation puts it at 83 million. Whatever the number, it is certainly not zero. Those people will not have the option of keeping their existing health care.
“… a new report by the Lewin Group (commissioned by the Heritage Foundation) finds that the House Democrats’ health care bill would shift more 83.4 million Americans from private health care coverage to the government plan. To put that in perspective, that would mean that nearly half (48.4 percent) would lose their private health coverage.”http://spectator.org/blog/2009/07/20/study-83-mln-would-lose-privat
That is a lot of people wouldn’t you agree?
Some people have insurance available to them, but choose not to buy it. They prefer to buy health care as they need it. This may be unwise, or not, but it is what they want. (It includes some who choose to go to another country for health care, in whole or in part.) Under proposed legislation, this will not be allowed. Therefore they will not able to keep what they have. So, to force them to carry around health insurance when they don’t want to change the plan they have is well FORCING THEM INTO THE PUBLIC OPTION.
Another Example
In the Baucus mark-up from the Senate Finance Committee, and all other legislation proposed by Democrats of which I am aware, the law requires coverage at a minimum of 65% of actuarially expected costs.http://alankatz.wordpress.com/2009/09/20/senator-baucus-health-care-reform-bill-qa/
This will make a large number of existing insurance policies illegal. In some states, a majority of the policies. That comes from the senate testimony. The people with those policies they will be unable to
keep them.
Under HR 3200, if a person loses their job they have no choice but to take the government option. (p. 16, op cit)
It is possible that the Democrats will accept legislation that permits keeping what a person now has, but it seems unlikely. President Obama make his big speech with the standard claim when HR 3200 was the only bill on the table, and he did not acknowledge the real problems. It is therefore apparent that the Democrats are playing a game of semantics, claiming that if the lose of choice is an inevitable consequence of the legislation rather than in explicit language, it doesn’t count. It counts.
Perhaps the loss of current health care plans is a net benefit, perhaps not. That’s not the subject of this debate. The debate is about the truth of the assertion that “if you like your current health care, you will get to keep it.” The statement is is in all likelihood false.
But you can believe what you like Chris.
I think this is a really confusing topic for most people to understand. I didn’t know that roughly 45 million Americans currently lack any plan (public or private) for health care. This plan is suppose to give people a better choice of what to pay by having a government option and also many private options. I also didn’t know that a majority of doctors supported the choice but since they do I’m assuming that it’s because they will get paid by the government and not have to count on individuals.
I think it would be good to have a public option. Since it creates a more competitive environment for health care it means that the people as a whole will gain a better service because the companies will try to beat out each other by impressing the buyer. I really feel like the nation should be given the choice between staying with a private company and deciding to go to the government for help.
Where is the government going to get the money to pay for this public option plan? The people supporting the plan keep saying it will be less costly but where will they get the money to make the lack up? Do they plan to tax us more? If they do then wouldn’t we still be paying the same money just in a different way?
RE: Justin Fritz the Conservative
Thanks very much for the long response to my column. Obviously you’ve thought a lot about this issue, and that is valuable for anyone, regardless of our particular views. We need more people who are willing to wade into the details and honestly inform themselves about political issues that affect us all.
That being said – Mr. Kautzman forwarded me your post so that I might respond. I have a couple points to make…
First, on your claim that the “death panel” statement by Sarah Palin illustrates a legitimate concern. You should check out the website http://www.PolitiFact.com. They are a Pulitzer prize winning organization that fact-checks statements made by politicians and gives them a rating on the “truth-o-meter” of either true, mostly true, half true, barely true, false, or pants-on-fire. It’s amazing how many misleading statements are uttered by both Republicans and Democrats on a day to day basis.
To quote PolitiFact.com, a neutral, fact-checking website on the death panels, “We have read all 1,000-plus pages of the Democratic bill and examined versions in various committees. There is no panel in any version of the health care bills in Congress that judges a person’s “level of productivity in society” to determine whether he or she is “worthy” of health care.” They rated this statement as “pants on fire,” in other words, totally unfounded and not true.
http://www.politifact.com/truth-o-meter/article/2009/aug/10/palin-death-panel-remark-sets-truth-o-meter-fire/
Second, you cite the Heritage Foundation as your source for the claim that “House Democrats’ healthcare bill would shift more than 83.4 million Americans from private health care coverage to the government plan.”
We need to be honest in this debate, which means citing non-partisan, widely trusted sources of information as the basis for such claims. When you go on the Heritage Foundation’s own website, their mission statement is, “Our Mission: To formulate and promote conservative public policies…” Obviously the Heritage Foundation is not the trustiest source of information. They have a conservative political agenda and would never publish an “analysis” of any bill that did not support their agenda and goals. That doesn’t mean they are wrong about everything, but clearly we should take what they say with a huge grain of salt.
On the other hand, the Congressional Budget Office (CBO) is a widely trusted, non-partisan, independent organization in Washington, D.C. that is the foremost authority on government policy analysis in the country. It might be true that some employers may choose to drop insurance for their employees, but despite this, CBO estimates that only 10 to 11 million Americans would be signing up for the public plan.
http://www.reuters.com/article/governmentFilingsNews/idUSN2754421620090727
As a side note, this Reuters article mentions the fact that the Lewin Group is actually a subsidiary of United Health insurance company which has a vested interest in killing health reform. Again, more conflicts of interest with the organizations you are using to cite your data. I trust the Congressional Budget Office’s data over the Heritage Foundation and Lewin Group any day. And if the CBO numbers are accurate, we have little to worry about in terms of mass numbers of people losing their private health insurance. If only 11 million will sign up for the public option, obviously the vast majority will in fact keep the plan they currently have.
Finally, to your statements about mandates on buying insurance.
You say that, “Some people have insurance available to them, but choose not to buy it. So, to force them to carry around health insurance when they don’t want to change the plan they have is, well, FORCING THEM INTO THE PUBLIC OPTION.”
First of all, a mandate that everyone buy insurance does not mean anyone would be “forced into the public option.” You seem to forget that the public option it is an OPTION. A mandate means you must carry some kind of insurance, any kind, whether private insurance or some version of a public plan. The mandate does not force anyone to sign up for the public plan over private alternatives. That is simply not true.
Secondly, there is in fact broad agreement among Democrats and many Republicans on a government mandate that compels everyone to purchase insurance. Obviously if you work and your income does not permit you to afford it, the government would provide subsidies to assist you. The idea behind it is similar to the idea behind requiring that everyone have auto insurance when they drive a vehicle. By getting everyone into the system, you share the risks, have more collective bargaining power, and lower overall costs for people who actually utilize the insurance when they get in an accident (or get sick, in the case of healthcare). So we clearly have other insurance mandates already that we take for granted in everyday life that no one seems to think are a bad idea.
Also, people who don’t have insurance frequently can’t pay for emergency room care when the time comes that they actually need it. Guess who picks up the tab? Taxpayers. Many groups estimate that each American family pays a $1,000 hidden tax on emergency room care for the uninsured. So is it fair to require everyone to have insurance (or at least fine them if they don’t)? I would argue that yes it is, because by choosing to not have insurance, the uninsured are actually costing the rest of us a LOT of money.
So in summary…
1) The death panel claim is completely false.
2) The Heritage Foundation and Lewin Group are questionable sources of information.
3) The CBO estimates only 10-11 million will sign up for public option, not 80 million.
4) An insurance mandate means you must sign up for ANY plan, public OR private.
5) We already have mandates on insurance in America: auto insurance.
6) Taxpayers pay the enormous cost of emergency room care for the uninsured, so a mandate that assists those who truly can’t afford it is justified in order to reduce overall costs.
Those are all the points I have time to get to right now. Thanks again for the discussion!
Chris Jordan
I guess this is the best place to start.
The death panel claim is completely false.
That in and of itself is a false claim. I don’t trust Sarah Palin myself, so I did more research and here is what I found. National Healthcare obviously requires government oversight, otherwise anyone who decided that they want a breast augmentation or a free x-ray could go get it without any immediate costs to themselves. As a result much money that should not have been spent is spent. So, a beaucracy is set up to decide who is approved and who isn’t approved for medical treatment. There would end up being a waiting period before treatment. Canada is a good example of this. Of the 37,000 people who died in hospitals only a quarter that’s 25% received some form of palliative care and the majority who received care were terminally ill patients. Certainly, doesn’t sound like my life is the government’s hands do it? However, the big issue in your article I want to discuss is not whether the death panels be true or false but that keeping your own insurance is true under the healthcare plan being proposed.
If I understand you correctly it is that because the pending legislation does not require a direct change in their existing health care a person can keep their existing health care provider. I find that assertion to technically be correct. However, as a consequence of the legislation it is extremely likely that a substantial number of providers and policies currently provided by insurers will become unavailable. Thus making some people lose their existing healthcare.
Whether people have much of an option or healthcare insurance is not the issue but rather the statement “ if you like what you have you can keep it. The government plans to undercut the free market by 20%, perhaps 30% and up to 40%. Many employers will elect to pay substantially more in an attempt to compete with the government’s unlimited resources and power to set the rules.
Under the Baucus mark-up and all other legislation, a large percentage of existing health insurance policies in some states a majority will become illegal. The effect of this is that if the plan you currently have is now illegal you can no longer choose it. So, people will not get to keep what they have.
“Everyone will be able to choose the government health care or not” I think you misunderstand the issue. Some people currently do not have any health care insurance and are happy with what they have now. Which is to say they are happy with buying health insurance as the need arises. The issue here is the fare of those people who do not want to purchase health insurance but are happy fending for themselves. All of the legislation proposed by the Democrats has a mandate for individuals to purchase health insurance whether they want to or not. So, once again these people will not be able to keep their plan.
Unless I am mistaken you said something along the lines that the government sees that the current prices and policies are outrageous. So, they plan on showing the, how it’s done so to speak. This should result in lowering costs, eligibility and providing more coverage.
The way the government does things like that is
a) Use unlimited tax dollars to subsidize losses
b) Set payments to providers by law independent of costs and markets
c) Exempt themselves from regulations by the states, The Securities and Exchange Commission, and other laws
d) Exempt themselves from federal, state, and local taxes
e) Use taxpayers to raise capital at little or no cost
f) Mandate that consumers buy their product
Now, suppose you or I wanted to set up a grocery store and somehow advantages a-f were obtained over our competitors. Well, all competitors not having those advantages would be forced out of business. How can they compete while the chosen store could rack up unending losses, require customers to buy product, escape taxes and regulation, and control what they paid providers? Healthcare is just the same. How can private enterprise compete with the infinite taxpayers subsidies for loses? Or the exemption from all regulations and taxes. They can’t.
In sum, it is not possible for private enterprise to compete with the government, so whatever private industry exists at the start of the public option, it will be rapidly reduces, People will not be able to keep what they have now because it will must likely not exist.
I understand that this is about helping the poor or the less fortunate. But the government was created by the people to improve the people. It was not created to help the poor.
The United States government’s preamble to the Constitution is a good example. It was not until 100 years later by the Supreme Court that the government could create programs that helped the poor.
The government was created solely for defense. The Roman Empire grew because of its ability to conquer people without organized government. The Roman Government was military-based, and it lacked any sort of programs to help the poor, as did most early governments. It became futile to have a country without government. The Idea that government had a duty to take from the rich and give to the poor was worded by few people recently, such as Marx, Lenin, Roosevelt, and Castro. This was a new idea, and the governments that use it have already been created and failed.
In conclusion to say that you can keep your current plan is in all likelihood a false statement and the government is not there to provide for you, it is there to protect you.
Responding to Justin Fritz:
I like your enthusiasm to support your beliefs on the healthcare debate. Although, it seems that you are just finding all the nit picky things you find to be wrong with the plan being proposed. I’m not sure if you like the current healthcare system here in the United States, but if you don’t I would suggest trying to come up with solutions to the problem that you support other than just attacking the efforts to fix the problem.
In response to Justin Fritz:
I don’t know if you like the health care plan or not, but it doesn’t seem like you do. I agree with J.J. that you complain way too much about what is going on right now. What would you like to see the government doing? I don’t understand what you think would be a better option. You said that “some people currently do not have any health care insurance and are happy with what they have now”. They’re happy not having health care insurance? You also said that the government was created to improve people, not to help the poor. Don’t poor people need improvement too? I believe that the government was not created only for defense. It was created also to help put people on the right track and provide for them.
In response to Krystal Roach:
From what I know, the government receives the money from our multiple taxes, and then uses that to regulate the public option plan, dividing it where it needs to go. It is hard to say if it’s really less costly and more efficient, because I think private insurance companies to a better job in helping with the public’s needs. Since it is their main focus, and that is their job. The government however, has so much on it’s hands that it may seem impossible for it to enforce this public option, and do a decent job with it.
To JJ
I am not looking for fault within the legislation just to find fault. I am looking to proof false the claim that you can keep your current insurance under the new legislation. I do not like to be lied do and neither does most of the public. So, when the legislation and administration lie to me, I think it is my duty to point it out and show others they have been lied to.
In response to Krystal Roach: “Where is the government going to get the money to pay for this public option plan?”
The government is planning on cutting from existing programs and also raising the taxes of wealthy families of America. I have also heard that they really want to place taxes on sugar sweetened beverages and alcoholic beverages as well.
In response to Haley Anderson:
I sort of find your comment a bit contradictive because at first you say that the Public Option isn’t that great of an idea because the government interference of health-care. Then next you say that if Public Option works for you or your family that you should buy into it.
I don’t exactly know where you’re standing on the subject if Public Option passes then we will have low cost health care set up for everyone in the country, and also have the private insurance offered. These private insurers aren’t being interrupted by the government they are merely upping the competition with public health care. If the government is working so hard to give this to every American they have pretty much earned the right for ’some’, not full, involvement.
In Response to Justin Fritz the Conservative:
A couple things, Justin.
First on death panels. My claim that the death panel statement is completely false is also based on research. It’s based on a cited, nonpartisan, pulitzer-prize winning source, http://www.PolitiFact.com. What is your source? You brought up the Canadian system as your proof, and talked as if that is somehow the system being proposed here. Even the most liberal bill floating around in Congress is not even close to the system they have in Canada. It is not a single payer, government system being proposed. It’s some new rules, a new health insurance exchange (essentially a new marketplace), a mandate to buy some kind of insurance, and hopefully a new public option to COMPETE with private insurance.
You said that, “The government plans to undercut the free market by 20%, perhaps 30% and up to 40%.” Where does this claim come from? Consider the fact that 45 million people have no health insurance right now in this country. The bills in Congress mandate everyone to buy insurance. The CBO estimates only 10-11 million people will sign up for the public option. How can you possibly argue that the government is going to undercut the market, when the actions the government is planning on taking will literally mean 35 million NEW customers for PRIVATE health insurance that are mandated to purchase that product? Those are the CBO estimates, not mine.
Also to respond to a couple of your points on unfair government competition. You said that the government has an unfair advantage and will “mandate that customers buy their product.” Again I think you are not clearly understanding what the public option is. It is a another OPTION that will be alongside private insurance. The mandate is not a mandate that people buy PUBLIC insurance. It’s a mandate that they buy ANY insurance, public OR private. It’s not a mandate that people by “their” (the government’s) product, it’s a mandate that they buy A product, any product. Again I’ll say that CBO estimates only 10-11 million people will sign up for the public option. This means 35 million new customers for private health insurance companies. How can that be unfair to private business? It’s a gift to private business.
You said that “it’s not possible for private enterprise to compete with the government.” This is clearly false – and the postal service is a clear example. The US Postal Service is a government run enterprise that competes with UPS and others – and the competition between them is fair. UPS, DHL, etc. are private companies doing just fine WITH government competition. And the government is not just throwing more money at the postal service while it is having financial difficulties, they are cutting back instead – which undercuts your claim that a government run enterprise automatically has unlimited taxpayer money to back it up. Our government is in debt. That’s the whole point of health care — to lower costs and save us money. The CBO estimated the health care bill will reduce the federal deficit by $80 billion over 10 years, because it is designed to CUT COSTS. The public option is designed to save us money by providing competition – and we CAN set up that competition to be fair. It can’t really be debated — the postal services proves this to be true in reality.
Finally, I want to address your claim that government only exists to protect people. If this were true, we should have no public education, no public schools. One of our founding fathers, Thomas Jefferson, has historically been given much credit for advocating a public, government run education system. Here are some of his quotes in support of this system…
http://etext.virginia.edu/jefferson/quotations/jeff1370.htm
If government exists only to protect people, then why did Thomas Jefferson want public education as part of the government? And if government exists only to protect people, why does Article I, Section 8 of the US Constitution read that Congress shall have the power to “pay the debts and provide for the common Defence and general Welfare of the United States.” Providing for the general welfare seems like a lot more than just protecting people to me. If promoting the health of citizens doesn’t fall under promoting “general welfare,” then what does?
I’ve put in my two cents don’t think I’ll be back to post anymore. It’s YOUR class after all! Feel free to respond to anything I just said but I think I’ll let you guys get back to debating each other now! Have a great year – Kautzman is the man.
at this point I don’t care about the death panels. You can win that point. But, isn’t the real issue behind healthcare the cost? Well, I did some more research and well hopefully you can explain what I found Chris.
Advocates of increased government involvement in health care frequently cite the profits of private health care providers as a major part of the costs of health care.
An example of the criticism is that of Representative Anthony Weiner (D-NY), speaking on the Rachel Maddow show, who said, speaking of proposed legislation that would heavily tax the health insurance industry:
“Well, the one behavioral change we are clearly not going to see is the insurance companies aren’t going to suddenly start saying, ‘You know what, we are going to stop making 30 percent profits and cut it down to 10 percent or 5 percent because of this bill.’ “www.msnbc.msn.com/id/33293461
So are the insurance company profits really 30%, as claimed?
Fortune magazine
money.cnn.com/magazines/fortune/fortune500/2009/performers/industries/profits/
rated the health insurance industry as the 35th most profitable of 53 industries surveyed for 2008:
35 Health Care: Insurance and Managed Care 2.2%
In 2006, in better economic times, health insurance company profits were 7.1%.money.cnn.com/2009/09/01/news/economy/health_insurers_ceo_pay/index.htm
Total insurance company profits were $12.87 billion in 2007 and $8.40 billion in 2008 http://www.politifact.com/truth-o-meter/statements/2009/oct/07/jay-rockefeller/rockefeller-says-health-insurer-profits-have-risen/
Total health care spending in the United States was $2.2 trillion in 2007. Isn’t that less than only double the proposed the bill?
http://www.kaiseredu.org/topics_im.asp?imID=1&parentID=61&id=358
Insurance company profits were therefore 0.59% of total health care costs in 2007. Since total costs have been rising at about 6%, the insurance company profits would be about 0.36% of total health care costs in 2008.
Because insurance company profits are much less than 1% of health care costs, they are not a major factor in health care costs in the United States.