Public Health Option
By Ali Sattar
The entire purpose of healthcare reform is basically two-fold: to cover the uninsured, and to lower skyrocketing costs.
I’m the first to admit that there are legitimate criticisms to be made about such a plan; I’m referring, of course, to the hotly contested “public option”.
“Public” because it would be government administered, and open to the general public; “option” because it would be another alternative, blended seamlessly into the current health insurance landscape to create a mixed public and private system.
Although I have my criticisms, ushering every American into the private sector through a mandate (as Max Baucus’s popular Senate Finance Committee bill currently proposes) will only be perpetuating a broken system.
The former might as well be a part of the latter; aside from tugging at society’s heartstrings, the uninsured inevitably wind-up tugging at its purse strings.
If cost containment, “bending the cost-curve,” as some call it, is the fundamental motivation for reform, why is there so much resistance to the one key item that would reduce costs the most?
The pros and cons of such an arrangement have been well documented and debated to the point of disgust.
I realize that not everyone has a stomach for protracted policy food fights, so I’ll outline the key benefits of a strong public option.
The role of a public option, however implemented, would be to serve as a legitimate competitor to private insurance companies.
According to the U.S. Bureau of Labor Statistics, health insurance premiums from employer-sponsored plans nearly doubled between 2000 and 2006.
With no low-cost competition, what’s to stop premiums from doubling again by 2012? And with specific anti-trust protections, who’s to say the industry isn’t actually engaging in price-fixing?
A public option (good) would also guarantee acceptance to comers. The private plans (bad) specifically deny coverage to those with “pre-existing conditions” because those people would be more likely to actually use their coverage.
The health insurance industry is a giant risk pool – everyone contributes to the pool with their monthly premiums and deductibles, and this huge pool is then used to pay out medical expenses the plan’s beneficiaries incur.
This system is the reason why insurance companies specifically exclude those with pre-existing conditions -like chronic illness- because they would draw from the pool more often than the average beneficiary.
The system works because the majority of people who are covered by the plan won’t need it very often.
Half the reason for reform is to cover the under- and uninsured in America.
Without an affordable public option this large swath of the population (estimated to be between 30 to 40 million) have no choice but to go without health insurance.
Lacking basic coverage, they go without treatment for chronic illnesses and wind up in the emergency room of your local hospital, where you and I foot the bill.