Attending the NCDC picnic Sunday, I had a chance to talk with both Rep. Glenn Nye and Rep. Bobby Scott about health care, an issue at the forefront of many minds these days as Congress grapples with it. The differences between the approaches of these two Virginia representatives is a microcosm of the debate going on in Washington between Democrats. The Republicans are pretty much united against any form of government-run health care plan.
Those conversations took place on the heels of a recent New York Times/CBS News poll on healthcare, which the NYT discussed in this article. An astonishing 72% of those polled support “a government-administered insurance plan — something like Medicare for those under 65 — that would compete for customers with private insurers.”
It boggles the mind to think that Democrats – you know, those guys we all worked so hard to elect – are arguing amongst themselves about instituting a government-run plan. Isn’t that one of the reasons we supported a Democratic majority? And with the country firmly behind it, what is the hold up?
We’ve got a big stick – for how long, who knows? – so we might as well use it.
VIVIAN J. PAIGE | All Politics is Local 
If there’s no public option, then there’s no real health care reform. I’m becoming pessimistic that we can get this done before the big money boys in insurance and pharma buy off the Congress.
“a government-administered insurance plan — something like Medicare for those under 65 — that would compete for customers with private insurers.”
But that is NOT what is being proposed, by anyone. What IS being proposed would not compete with private insurers, because the “public option” would not be paid for by premiums, but by taxes. As such, the “public option” would not be an option at all — we would be forced to pay for the insurance whether we wanted to or not. We just call those payments “taxes” instead of “premiums.”
I must be very confused. I get charged a tax for Medicare. It’s specifically listed as a deduction from my paycheck every payroll period. It is not a premium for insurance, because I am not insured by Medicare. I pay a separate premium for the health insurance I am covered by.
So, I fail to see how Medicare illustrates your argument. Does anyone have a choice on whether to remit payroll taxes? I mean you do, but the consequences can be dire.
As far as the “public option” this is just your speculation as to how it would work. We have nothing on the table really to critique. But even still it is doubtful that any plan would work solely based on tax revenue. Yes, there would be some subsidy to ensure that people who would normally not be able to afford coverage can. But regular folks would most likely pay premiums and co-pays and deductibles like any other insurance policy. Depending upon how the plan ultimately works out you may be able to cover the cost of the subsidy through higher premiums on those with greater ability to pay.
And subsidizing the cost via tax revenues for folks who couldn’t normally pick-up the cost is something we do now. There are a range of programs that do that outside of just Medicaid.
How many private health insurance plans are there for people over 65? I’m not talking about supplemental insurance, but insurance that one can buy in lieu of Medicare.
Given that the “public option” has been estimated to cost the government x amount over y years, one must assume that that amount will be covered by taxes, not premiums.
“Depending upon how the plan ultimately works out you may be able to cover the cost of the subsidy through higher premiums on those with greater ability to pay.”
Huh? If this is an option, you cannot charge premiums based on ability to pay, or those with the greater ability will opt out.
“Subsidizing the cost via tax revenues for folks who couldn’t normally pick-up the cost is something we do now.”
Are we going to subsidize private insurance policies as much as we subsidize the public option? Somehow I doubt it.
Actually, Mouse, this was discussed during the election last year. As I understand it, those who can would pay premiums and those who cannot would be covered by the government.
Secondly, right now there is a base amount charged for Medicare coverage. Higher premiums are charged for those who make more money.
Finally, this option would be offered alongside any private insurance. My understanding is that Medicare is 97% efficient – meaning that only 3% of the money goes to administration – while private insurance is somewhere between 60%-75% efficient – with 25% to 40% going to administration, profit, etc.
If that is the case, then even charging premiums based on the ability to pay works – because the premiums would still be lower than those of private insurance.
Let’s say the unsubsidized public option premium for those who could pay it is $5000/yr. Would those who cannot pay be given $5000 to buy private insurance? In a word, no.
There is no option to Medicare, is there?
How can it be offered alongside private insurance when one is subsidized and the other is not? That is not a fair fight. Private insurance would quickly go out of business.
Even if there were no Medicare, there would be few private insurance plans for people over 65. And those in existence would have astronomically high premiums to reflect appropriately. You would find something similar with life insurance or long term care insurance policies.
Saying that something must cost x amount over a span of time does not necessitate tax revenue. Premiums can certainly be set to recover unreimbursed costs. Some of that cost shifting occurs today.
Whether premiums are able to cover the subsidy depends on how large a pool of insured the government can get and the demographics of that pool. How competitive their plan is depends on other things besides the premium. So, it is possible over time they draw participants and the premiums from those participants pays for the subsidized members. You can also acheive this by mandating coverage. So, people who might not be covered by employer based insurance and who are young and healthy might default to this plan if they don’t choose something else. I don’t know if that is a big number though.
However, whether premiums can pay for it though is highly speculative and pointless for us to discuss. Neither of us are actuaries with enough data to calculate what the premium would need to be and whether that would still make the plan competitive.
“Even if there were no Medicare, there would be few private insurance plans for people over 65.”
That assertion is belied by the plethora of supplemental insurance plans. If there is a market, there will be a supplier.
“Saying that something must cost x amount over a span of time does not necessitate tax revenue.”
Yeah, we could just go more into debt and put it on our grandchildren.
“Premiums can certainly be set to recover unreimbursed costs.”
In which case it is not factored into the cost estimate.
“Whether premiums can pay for it though is highly speculative and pointless for us to discuss.”
On the contrary, it is exactly the point. If the government plan is subsidized by taxes, then it is, ipso facto, not competing with private insurance, but unfairly undercutting it.
Viv,
This is on topic:
http://www.vagazette.com/articles/2009/06/22/blogs/doc4a32d139f00a3772228440.txt
Good article. You know, there needs to be a way to leave comments over there.
Yeah. There is, but you have to basically sign away your first-born child for the privilege. I’ve been talking to the tech people about changing that.
you are going to rely on a poll from the NY Times & CBS News!
The only reason you think the country is firmly behind it, is because they don’t know how much it is going to costs or want to take into consideration the costs of such a plan.
Steve-
if they are forced to compete with a public option, which is likely to be cost less and be run more efficiently.
Really?! Come on, you must be smoking crack if you think it will cost less and be run more efficiently.
Brian,
Medicare runs more efficiently than any private health care plan. Less waste, fraud and abuse. As to less expensive…not hard for he public option to be less expensive than private health insurance. Why do you think the insurance companies fear a public option so much. They know that, given the choice, most people over time will switch, killing their business.
Especially when the public plan will be subsidized and the private ones won’t.
Maybe this is why they’re hesitating
http://bearingdrift.com/2009/06/22/health-care-and-polls/
That was 1993. This is now, 16 years later. We have more people without health insurance, more people who are underinsured and health care costs that are rising at a rate far exceeding that of inflation.
I know how much you guys want it to be 1993, but get over it 🙂
Well, even assuming arguendo the legitimacy of that figure — which I doubt — your point appears to be that whatever a supermajority of Americans support should be enacted, right?
I look forward to you work for a National Right to Work Act, since there isn’t a poll which demonstrates less than 75% support for the proposition that no one should be forced to join or pay dues to a union as a condition of employment.
I know you’re not going there with that “supermajority” argument. The majority – much less a supermajority – imposes its will on the minority every day in this country.
Yeah, but you didn’t answer the question, Vivian.
Of course, now the truth has come out about this “poll” (http://www.cnsnews.com/public/content/article.aspx?RsrcID=49999).
Probably couldn’t have gotten a higher percentage if you’d surveyed the White House staff.
That’s why we have a Constitution — to protect the minority from the majority, and the States from the central government.
This “public option” is unconstitutional.
First, you have assumed that the government would not help those who want to buy private insurance. I don’t think that is the case.
Second, if the government can offer insurance at a lower premium than private industry, then the private companies need to figure out how to reduce their premiums, plain and simple.
Look – as a sole proprietor, I’ve been gouged for 22 years, while those in larger groups have been subsidized with my tax dollars. Time for the pendulum to swing the other way.
At the same rate they subsidize the public option? I’ll take that bet. They don’t do it now for Medicaid or Medicare, do they? Why would you expect them to do it for this?
The government can offer insurance at a lower premium because that offer is subsidized by taxes. Remove the subsidies, or pay exactly the same subsidies to the private insurance, and then we can see which is more competitive.
The only thing the federal government runs well is a deficit.
You will have to explain that to me, Vivian. How has the insurance of larger groups been subsidized by your tax dollars?
1. Prior to Medicare, what insurance was offered to seniors?
2. To say that “They don’t do it now for Medicaid or Medicare, do they?” is incorrect. Medicaid is the government’s insurance policy for poor people, so I’m not sure what your point it. If you can afford insurance, you don’t need subsidy. And what would you offer to people for Medicare if there is no alternative?
3. The government can offer lower premiums because of lower costs. As I mentioned way above, the administration costs for Medicare are about 3%. If the administration costs in the private sector were 3%, the premiums would be lower.
My share of the tax pie is higher because the employers who deduct premiums and the employees who don’t pay taxes on the premiums paid by the employer is smaller.
We discussed this all before, Mouse. You are being intentionally obtuse.
1. Kinda hard to look that up now.
2. My point is that the poor are not offered the option of taking the subsidy and buying private insurance.
3. If that’s true, then the government will not need the tax subsidies to be competitive, and can provide the exact same subsidies for people to buy private insurance.
Last — then perhaps we can agree to simply eliminate corporate income taxes, and your problem will be solved.
1. Yes, there is insurance avail for seniors. A friend who’s parents immigrated here after they were 65 (i.e., are not eligible for Medicare) just spent more time than he ever wanted to shopping for it.
2. You know why it’s so hard to find out about the options for #1? It’s because they all suck. Free market for the win, eh?
1. Please show me where to get it. Can I buy that policy and have my Medicare subsidy go to that insurance?
2. It’s not a free market if the game is rigged by the government.
The bottom line is pretty simple: what we have now doesn’t work. Time to try something else.
Change for change’s sake, or change for the hope of something better?
The problem is that what is being proposed will not simply exist alongside what already exists, but will destroy what already exists.
There’s no going back once we take that leap. We’d better be very sure that we are leaping to something better.
So, let’s say it does destroy as you say every private insurer. What is lost that is worth saving?
The problem is not the insurer, but the system under which it must operate. The current system started because the government froze wages. So companies started offering insurance as a benefit. The result was that those buying the insurance were not those using the insurance.
The things that you mention are unrelated to the current system under which insurance companies operate. So, what is the issue with the system under which insurance companies operate currently?
Actually, it is the system under which the insurance companies operate. Specifically the part about the insurance not being paid for by those who use it. That is a huge driver of costs. Do you pay for car insurance that covers gasoline, air in your tires, and oil changes? Of course not. But if someone else were paying for such insurance, you’d love it, and you’d not be too concerned about gas mileage or oil leaks, either.
So, put the consumers back in charge.
The second problem is that of pre-existing conditions. That, too, is easily solved. Going back to the car insurance analogy, if I am switching from Insurance A to Insurance B on Monday, but have an accident Sunday night, Company A is still on the hook to fix my car. Similarly, whatever insurance you have when you first see a doctor about your condition is the insurance that is on the hook to pay for it.
We pay twice as much as the average of other industrial democracies and rank well below average in most measurable categories. Our current system stinks.
On top of that sad story, cost are escalating so rapidly that it in a few years, health care will consume over 25%, possible 1/3, of our GDP.
There is only one option and that is to take the profit out of health care system. HMO CEO’s making 3 billion dollars is a joke and travesty. If the incentive is between profits and health care, I know which side the HMO’s will take.
It may not be politically feasible at this time, but single payer is the only solution. It will be good for our international competitiveness to get employers out of the health care providing business so they can invest in making better and less costly widgets increasing market share. We might actually attract more foreign investment from companies who refuse to build a factory in the USA because they become health insurance providers. Canada is a better option where that cost in not charged to them.
Lastly, the elephant in the room is over half of the cost you will incur in your lifetime are in the last year of your life. There needs to be some real soul searching on how we die, and pay for it, in this country.
So it goes….
“If the incentive is between profits and health care, I know which side the HMO’s will take.”
True. That goes back to the root of the problem — that you are stuck with whatever insurance program your employer purchases. Break that link, and rectify the pre-existing condition problem, and you’re done. If you want to have vouchers for the poor to buy insurance, that can be done at the State level.
That is how governments hold down costs — delay until the patient is dead.
No, Anon, this is how insurance companies hold down costs. You’re insurance company wants you to pay premiums for 30 years and then die instantly in a car crash when you’re around 50 — before the actually have to provide any health care.
Which is what the government wants to happen with your Social Security and Medicare payments. What’s the difference?
Also, I just want to say that it takes a special kind of @sshole to stand firmly in the way of universal healthcare. I’d wish a compelling example upon you and yours, except, well, I’m not like you.
Shhhh. Don’t tell the republicans or democrats elected in swing districts or states, but it would be a good idea to expand medicaide to working class people who are not insured. Please do not tell them that, these people are already paying for it to cover poor families and individuals who are not working and are not insured. Please do not tell them also that Medicaid is a public/government run plan too. Its a good idea. But, Please do not tell this class of democrats and some republcians may warm up to such an idea to make universal healthcare a reality finally.!!!