THE PUBLIC OPTION

One of the other major problems that have been causing much of the controversy has been the so-called Public Option. In its latest configuration it seems to be a government run insurance program that would be in competition to the commercial carriers. Supposedly the Public Option would be comparable to Medicare, or perhaps even Medicaid.

I have no idea what the exact provisions of the public option are in the house bill. I am forced to depend upon the writings of those who claim to have read all one thousand pages. It has been said that the so-called Public Option in the present house bill draft is a watered down version Hacker’s, a professor at Berkeley, original proposal.

Hacker predicted that his proposed public program would so closely resemble Medicare that it would be able to set its premiums far below those of other insurance companies and enroll at least half the non-elderly population Hacker’s “Health Care for America Plan” would enroll 129 million people (50 percent of the nonelderly population) and cut the uninsured to 2 million. Through it, roughly half of non-elderly Americans would have access to a good public insurance plan…. A single national insurance pool covering nearly half the population would create huge administrative efficiencies.

Proponent’s estimates suggest that roughly half of non-elderly Americans would remain in workplace health insurance, with the other half enrolled in Health Care for America…. A single national insurance pool covering nearly half the population would create huge administrative efficiencies…. Because Medicare and Health Care for America would bargain jointly for lower prices …, they would have enormous combined leverage to hold down costs.

Hacker’s version of the “public option” would, as of 2007 would have: enrolled 129 million enrollees (or 50 percent of the non-elderly); Have overhead costs equal to 3 percent of expenditures; Pay hospitals 26 percent less and doctors 17 percent less than the insurance industry (but these discounts would be offset to some degree by increases in payments to providers treating former Medicaid enrollees); and, Set its premiums 23 below those of the average insurance company.

His argument was that Medicare was a great success. However Medicare started with a potential large population base from those over the age of 65. The base for those eligible for the Public Option is not captive and has to be reached with the setting up of administrative offices, advertising campaigns, and enlisting providers willing to accept lower income. No consideration was given to the fact that Medicare has been plagued by excessive administrative cost perhaps due to the fact that the programs are contracted out to the private sector.

However, according to the Congressional Budget Office, the “public option” proposed in the House “tri-committee” bill might insure 10 million people and would leave 16 to 17 million people uninsured. The CBO said its estimate of 10 million for the House bill was highly uncertain, which is not surprising given how vaguely the House legislation describes the “public option.” I have not considered the Senate version which is a non entity.

According to the CBO, the “public option” in the House bill (10 million enrollees (maybe!); 17 million people left uninsured) will have virtually no effect on health care costs, which means the “public options” cannot, by themselves, have any effect on the number of uninsured.

Never the less, many facets to this portion of the program have aroused the antagonism of various sectors of the population. Naturally the insurance companies, the leading antagonists, do not want a competitor who will be subsidized by the government at a lower rate than the insurers can operate. That is understandable, private insurance companies are in the business to make money. Don’t you and every one of us have an occupation in order to make money? The question is what is realistic and what is excessive. That even if the Feds establish this program the government subsidy will come from taxes. In effect there will be no true lowering of the costs of health care, just shifting-and hiding- the source of paying for the insurance.

I quote from a source that I do not remember; Supporters of the "public option" think it can achieve efficiencies allowing it to under price existing insurers. But efficiency is to government programs what barbecue sauce is to an ice-cream sundae: not a typical component. Nor is there any reason to think Washington can administer health insurance with appreciably lower overhead than private companies. Medicare supposedly does so, but that is partly because it doesn't have to engage in marketing to attract customers, which this program would. It also spends less than private companies combating fraud and unwarranted treatments -- a type of monitoring that spends dollars while saving more.

As the Congressional Budget Office has pointed out, "The traditional fee-for-service Medicare program does relatively little to manage benefits, which tends to reduce its administrative costs but may raise its overall spending relative to a more tightly managed approach." False economies are one reason Medicare has done a poor job of controlling costs. Yes the so called Public Option as presently constituted presents many unanswered questions as to its potential in solving the problem of the uninsured or if it will be a step on the road to compulsory Federal run Health Care.

Yes there have been proposed other alternatives. An alternative to the Public Option, which has been offered as a compromise is the so-called Regional Nonprofit Cooperatives. Uwe Reinhardt,Princeton professor of Economics and Social Sciences, has been promoting them for over 30 years. He has based his opinions on the German healthcare system about which he has become enamored. such as the Regional Health Cooperatives.

The other alternate, which will be unacceptable to a large segment of the public, is a single-payer government operating healthcare program for. Healthcare. Providers such as the AMA representing the physicians, the pharmaceutical houses, and the insurance companies are all blamed for opposition to that program.

These alternatives shall await another day.