Public Option, Yes Or No? (UPDATED X2)

CADUCEUS

Lately, the focus of the health care debate has turned to whether or not the public option will end up being part of the final package.

While much of the debate over health care reform has focused on the public option, Matt Yglesias notes that, even if you were to cut the public option out of the legislation, we would still be passing a hugely progressive bill.

Keep in mind that health care reform will result in:

  • No Discrimination for Pre-Existing Conditions: Insurance companies will be prohibited from refusing you coverage because of your medical history
  • No Exorbitant Out-of-Pocket Expenses, Deductibles or Co-Pays: Insurance companies will have to abide by yearly caps on how much they can charge for out-of-pocket expenses.
  • No Cost-Sharing for Preventive Care: Insurance companies must fully cover, without charge, regular checkups and tests that help you prevent illness, such as mammograms or eye and foot exams for diabetics.
  • No Dropping of Coverage for Seriously Ill: Insurance companies will be prohibited from dropping or watering down insurance coverage for those who become seriously ill.
  • No Gender Discrimination: Insurance companies will be prohibited from charging you more because of your gender.
  • No Annual or Lifetime Caps on Coverage: Insurance companies will be prevented from placing annual or lifetime caps on the coverage you receive.
  • Extended Coverage for Young Adults: Children would continue to be eligible for family coverage through the age of 26.
  • Guaranteed Insurance Renewal: Insurance companies will be required to renew any policy as long as the policyholder pays their premium in full. Insurance companies won’t be allowed to refuse renewal because someone became sick.

And that’s just a short bulleted list.

The problem is that, while those reforms would improve health care for people who already have coverage, it does next to nothing to help the 45 million or so folks without coverage. That’s the point of the public option–to give free health care to those who can’t afford it on their own and don’t get it through their employers.

Right now, the suggested alternative to the public option is a health care co-op, which would supposedly make coverage more accessible without imposing the government regulation of the public plan.

But there are issues with co-ops–without the power of government regulation behind them, they would lack the ability to make much of an impact on the health insurance market. For instance:

[M]ost co-ops have difficulty fulfilling their goal of offering small employers and individuals a choice in health plans and reducing costs. That’s because to attract a wide array of health plans and exert purchasing power (bargain on behalf of its members), co-ops must enroll large numbers of employers. But without the ability to “offer substantial choice among well-known health plans, it is difficult for co-ops to attract enrollees, who are drawn to co-ops in part because of their ability to offer such choice.” In other words, it’s the classic “chicken-or-egg” dilemma.

[…]

But state-based or regional co-op health plans would be unable to exert the purchasing power of a Medicare-like public option. Whereas a public health care plan could use Medicare’s leverage and Medicare-like prices to negotiate lower prices and — through the miracle of head-to-head competition with private plans — push insurance companies to negotiate more aggressively with providers and dramatically lower health care spending, a cooperative will likely lack the clout to demand lower prices.

[Emphasis added]

As well as:

Hopes for co-ops may also be tempered by the experience of Iowa, home to Senator Charles E. Grassley, the senior Republican on the Finance Committee, which is trying to hash out a bipartisan health care proposal.

In the 1990s, Iowa adopted a law to encourage the development of health care co-ops. One was created, and it died within two years. Although the law is still on the books, the state does not have a co-op now, said Susan E. Voss, the Iowa insurance commissioner.

Wellmark Blue Cross and Blue Shield collects about 70 percent of the premiums paid in the private insurance market in Iowa and South Dakota.

To become established, a new market entrant would have to offer lower prices or better services, Ms. Voss said, adding: “Wellmark has a huge advantage. They already have contracts with practically every doctor in the state.”

[Emphasis mine]

If we’re going to cover the 45 million uninsured Americans, we need either a public option or a co-op, and every indication shows that co-ops are the less effective option–without the bargaining power of the government behind it, any alternate health care option would lack the muscle to compete with the insurance companies.

And remember, while a co-op is being portrayed as a compromise from the public option, the public option itself is a compromise from a single-payer system.  In the end, there’s only so much you can water down health care reform before whatever you pass fails to solve the very problems that necessitated reform in the first place.

In the end, I think we will get health care reform, and I think there will be a public option. There are 45 million uninsured Americans who we all indirectly pay for in some way or another; a public plan is the only way to get those people covered.  It’s really just that simple.

UPDATE: Democrats are downright stupid if they think replacing the public option with a co-op will make health care reform easier to pass. Remember, Republicans don’t want effective health care reform at all; they’ll find a reason to oppose any bill the Democrats come up with.

Remember how Republicans smeared the end-of-life counseling provision as some kind of government-enforced “death panel” euthanasia program, even though a lot of those same Republicans voted for a nearly-identical provision back in 2003?

Well, take a look at this:

In a conference call with reporters, Senate Minority Whip Jon Kyl (R-Ariz.) said that while some progressives view the co-op proposal as an unacceptably watered-down alternative to a public insurance option, Republicans think it’s still too similar. He indicated that both he and the party would oppose them.

“On the co-op… as Democrats have said, it doesn’t matter what you call it, they want it to accomplish something that Republicans are opposed to,” Kyl told reporters. “That is the step towards government-run health care in the country. The president himself said you can imagine a cooperative meeting that definition of a public option.”

It is [a public plan] by another name. It is a Trojan horse. And therefore no, I don’t believe Republicans will be inclined to support a bill,” he said.

[Emphasis mine]

It’s like I’ve said time and time again–sometimes you just can’t negotiate with Republicans. They’re the Party of No–they’re devoted to obstructing the Democrats at all cost–so there’s no use bending over backwards to try to win them over.

Single-payer was unacceptable to them, the public option was unacceptable to them, and now co-ops are unacceptable to them. Democrats would be smart to take the hint and focus on passing the best health care reform bill they can regardless of what the Republicans think.

UPDATE II: Also:

On Fox News yesterday, Sen. Jim DeMint (R-SC) agreed with Fox News’ Neil Cavuto’s claim that a co-op is really a “trojan horse”:

DEMINT: Whatever they call it Neil, this is a government takeover. They may try to call it a co-op. They can call it a public option, but you know they’re all on record saying they want a single payer government system, so any Republican now that helps them pass a bill is helping them pass a government takeover of health care.

[Emphasis mine]

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