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A public option that "competes" on a level playing field with private insurance is doomed to fail

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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:24 PM
Original message
A public option that "competes" on a level playing field with private insurance is doomed to fail
Period.

If public health insurance can't provide better coverage with lower premiums than private health insurance why in the world would any employer or private individual want it?

And if the "public option" in legislation restricts the ability of ALL employers and individuals to obtain private health insurance with better benefits at a lower cost what good would it be?

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nini Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:30 PM
Response to Original message
1. never mind
Edited on Sun Aug-23-09 09:35 PM by nini
on edit: I'm not sure what you mean by level playing field with your comments.

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donco6 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:31 PM
Response to Original message
2. How is lower premiums and better coverage a "level" playing field? n/t
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:38 PM
Response to Reply #2
6. It's not level. That's the point and that's the only way public health insurance can succeed.

A "level playing field" for public health insurance without an advantage over private health insurance would guarantee its failure.
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MannyGoldstein Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:32 PM
Response to Original message
3. I Don't Understand
Why would you say that a public option could not "provide better coverage with lower premiums than private health insurance"? All indications are that it would do a much better than private insurance job through lower administrative costs and stronger bargaining power.
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Honeycombe8 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:39 PM
Response to Reply #3
7. I don't think so. Look at Medicare. It provides less coverage than a standard ins. policy.
But it's free. And the person can BUY a Medicare supplemental policy.

I'd think that the PO option would work something like that, except that it would only be free to really poor people (subsidized), and would cost something for those who make decent incomes.

I'm wondering if that's what "they" mean by "level playing field." That the PO would be forced to provide at least the same level of coverage, when it might want to provide a lower level of coverage (like, say, a lower cap on total payouts).

Who knows. Whatever it is, it's important to have SOME choice besides a private insurance policy.
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DURHAM D Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:43 PM
Response to Reply #7
8. Medicare is not free - even without purchase of a supplemental policy.
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Honeycombe8 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:08 PM
Response to Reply #8
19. Oh, I thought it was. For the coverage. I know there are co-pays and such.
But I didn't think there was a monthly premium. There is?
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Diamonique Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:23 PM
Response to Reply #19
21. A monthly premium for Medicare comes out of my Dad's SS check every month. n/t
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DURHAM D Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:46 PM
Response to Reply #19
23. There is a monthly premium.
For 2009 it is 96.40. This is for just Part B of Medicare. Part B is for "Medical" Insurance (doctor visits. tests and outpatient services). If you are not drawing a SS check you receive a bill and mail in a check. If you are receiving SS it is automatically deducted from your monthly disbursement. Note: An individual who has yearly income of over $85,000 pays $135 a month. Over $107,00 a year it is $192 a month and so on.

Part A of Medicare is for "Hospital" Insurance. This is what employees and employers have been required to pay into since 1966. In order to qualify for Part A of Medicare you must have worked and contributed to this fund for at least 10 years. If you have not work enough years you pay $443 for this Hospital Insurance.

Both Part A and Part B have deductibles to be met. For instance - under Part A the deductible for a hospital stay is $1,068. This, and several other holes in coverge A & B is why seniors feel they must buy supplementals from private insurers. I won't comment on Part D - prescriptions because everyone knows it is f'ed up.

Obviously Medicare coverage is already a public/private plan. Frankly, because it is both it should serve as the perfect model for all citizens. Plus, the private insurance providers will still make money - just adapt the supplementals and let people purchase what they want and can afford.
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dflprincess Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 01:26 PM
Response to Reply #23
43. Though, if a Medicare recipient's income is low enough
as is the case with many elderly, (mainly widows who did not have their on Social Security to draw on, including my mom) the state will pick up the "medigap" coverage. At least Minnesota does. As a result, Mom might be broke, but she has excellent insurance. Her presriptions copays are $1.10 generic, $3.1- brand name with a maximum drug copay of $30.00/month (or something like that, she never hits the max). I think her office visits have a $3.00 copay and the 3 hospital stays she has had in the last 6 years have not had any out of pocket except for a $2.20 drug copay from the over night stay she had a few weeks ago.
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Honeycombe8 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 08:53 PM
Response to Reply #43
49. Got it. This explains how my poor cajun grandma got health care.
She could never have afforded to pay for health ins., whether govt. or private. I thought it was free, so maybe the premiums in her case were free because she didn't have any $. Altho, she did get a very small Soc. Sec. check from her husband (she was widowed at a young age). She worked in service jobs for years after that, but I think they paid her cash under the table.
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dflprincess Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 09:34 PM
Response to Reply #49
50. That must be it
I forgot to add that my Mother's income is low enough she doesn't have any premium costs come out of her Social Security check (which is her only income). She was also widowed young and even with the jobs she held later, she was better off collecting on my dad's account.

It's really sad that to have decent health care you either have to be rich or broke. If you fall in the middle you're screwed.
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Honeycombe8 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 08:50 PM
Response to Reply #23
48. I see. That was very informative. Thanks! I'm not as confused now! nt
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MannyGoldstein Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:46 PM
Response to Reply #7
10. I'm More Confused
Medicare provides coverage that's as good as most policies. I believe that the supplemental policies are primarily to cover co-pays and things that most other insurance policies don't cover either.

In any case, it would have been great if Obama and the congressional "Democrats" had tried on this one.
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Honeycombe8 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:11 PM
Response to Reply #10
20. Well, no (I think). Medicare won't pay for certain things that private ins. policies will.
You've seen those commercials advertising this product or that health care thingamajig that "Medicare won't pay for." Or that "Medicare used to not pay for, but has been changed and now WILL pay for." Those mechanical chairs that roll thru stores; catheters; fresh needles. Things like that.

And only certain providers will accept Medicare patients. So there is a more limited list of providers you can go to. Or used to be.

I'm confused, too.
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quiller4 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 03:33 AM
Response to Reply #7
33. You must look only at optimal plans. Most plans have a much higher
deductible than standard Medicare. My deductible is $3500 and according to the insurance commissioner $2500 is the average for individual plans sold in the state. (group plans are different. Many large group plans still have $500 or $1000 deductibles) After deductibles are met, many plans pay according to the same 80-20 split as Medicare.

Only Medicare A is free. Social Security recipients have a Medicare B premium deducted from their Social Security benefit check. The premium is low but not free.

The public options proposed so far are without lifetime caps but house plans also bar insurance companies for setting lifetime caps.
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:43 PM
Response to Reply #3
9. To succeed public insurance must have a big advantage over private health insurance.
The insurance companies whine that a public health insurance advantage would be "unfair" to them because they would have to lower costs and improve benefits in order to compete.

If the public option is required to operate on a "level playing field" with private insurance and is not permitted to offer better coverage at a lower price to ALL employers and individuals it will fail.

Is that clear now?
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MannyGoldstein Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:47 PM
Response to Reply #9
11. I Don't Think "Level Playing Field" Means Premiums and Coverage
At least I *hope* not - it should mean that there are no subsidies from the feds (for those who can afford the coverage).
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John Q. Citizen Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:54 PM
Response to Reply #3
15. The house bill and the Senate bill have it written in that it must be a level playing field
to protect the insurance industry. Here's HR3200 at tomos.gov
http://thomas.loc.gov/cgi-bin/query/F?c111:1:./temp/~c1... :

2) ENSURING A LEVEL PLAYING FIELD- Consistent with this subtitle, the public health insurance option shall comply with requirements that are applicable under this title to an Exchange-participating health benefits plan, including requirements related to benefits, benefit levels, provider networks, notices, consumer protections, and cost sharing.
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quiller4 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 03:38 AM
Response to Reply #15
34. That does not mean that they are required to set the same fees
just that their offering must meet the same requirements. That is as much a protection for the public as it is for the insurance industry. Otherwise the public option could be a very restricted catastrophic coverage plan rather than a comprehensive offering.

Without a need to enrich stockholders, a public plan could offer equivalent coverage at a lower premium rate.
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MannyGoldstein Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 07:41 AM
Response to Reply #15
37. Thank You For Providing This!!!
Edited on Mon Aug-24-09 07:41 AM by MannyGoldstein
Nothing more useful than having the actual language!
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John Q. Citizen Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 01:22 PM
Response to Reply #37
42. You are welcome. The more factual information out their the better!
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dflprincess Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:52 PM
Response to Reply #3
25. I think you're missing the OP's point
Steny Hoyer and others have said that any public option will have it's premiums set based on "market rates". Hoyer, in a NPR interview, actually said that if the public option has rates that undercut the private insurers it "wouldn't be fair" because the lower rates means people didn't have a "real choice" between public and private plans.

I agree with the OP - if the public option has the same rates and deductibles as private plans (and that looks like what will happen) it will fail. One reason being that in the start up period it will probably wind up with more of the people with preexisting conditions and have too many high risk people on it.
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MannyGoldstein Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 07:40 AM
Response to Reply #25
36. I Didn't Realize That Hoyer Had Said That
It's too fucking ridiculous to contemplate - thanks for that info.
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dflprincess Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 01:19 PM
Response to Reply #36
41. If you want to try & find Hoyer's NPR interview
the one I'm referring to was aired several weeks ago on (I think) "All Things Considered" and it occured within a few days of HR3200 becoming public.
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supernova Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:33 PM
Response to Original message
4. It would remove the delay of benefits for pre-existing conditions
Edited on Sun Aug-23-09 09:34 PM by supernova
For me, I always have to wait up to 18 months before I can see an MD at the start of a job because the stupid ins co, labels my congential heart defects as a "pre-existing condition," one they are therefore not responsible for.

Fuck private Insurers up the spreadsheet!

Publicly Financed Healthcare NOW!!
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Honeycombe8 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:35 PM
Response to Original message
5. I think of the public option as one that individuals would choose, not employers. And ...
I view it as an option for generally LESS coverage, but with lower premiums. In other words, I view it as a fall-back position for someone whose employer doesn't provide insurance and the person can't afford, or doesn't want to pay, the higher rates for private ins. (which also comes with better coverage).

Sort of like Medicare. Medicare doesn't provide full coverage like a private ins. policy would. That's why there's big business in selling Medicare supplemental policies.

I really think that the "supplemental policy" business may become big business with teh public option, too. Maybe that's what has ins. cos. so nervous....their full coverage policies that they sell NOW may gradually morph to become SUPPLEMENTAL policies.
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:52 PM
Response to Reply #5
13. That wouldn't be much of a public option at all.

And why shouldn't employers be allowed to provide their employees with better coverage that would cost less .... public health insurance.

Your points regarding Medicare are well taken. We need to get private insurance out of the Medicare business and provide full medical coverage to seniors and the disabled. The degree of medical support under Medicare should not depend upon the financial
status of recipients with the poorer being unable to buy supplemental private insurance.

Just look at that so-called "drug benefit" pushed and won by the drug cartel under the Bush administration. A huge handout to the drug companies that's handing them hundreds of billions of dollars. And they call that a benefit!
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Honeycombe8 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:07 PM
Response to Reply #13
18. I'm okay with Medicare supplemental coverage. Medicare is going broke...
without providing full care. I don't see how we could afford to provide even more, esp. considering, like you say, that Republican Rx part that was added (where we can't negotiate prices). Especially since, in Medicare, consider that ALL of the users of it need health care more than the average person, since they are older and nearing the end of their lives, when the body starts breaking down.

I'm OK w/the public option providing less coverage, at lower cost, to the individual. If I got fired and needed health care coverage, it would be a great thing to have a cheaper PO to choose (in view of the fact that I wouldn't have an income!), even if the co-pays are higher and the coverage less.

But I'm not against a PO providing the same coverage. But that goes along with a much higher cost.
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NYC_SKP Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:49 PM
Response to Original message
12. "Level Playing Field" is a little misleading.
"Level Playing Field", a Public Option would never really produce a level playing field, so the OP question is moot.
At best, the Public Option would approximate some of the questions of competition.

see text in bold below:

Audience Question: I have been in the health insurance business for over 25 years...If the public plan option reimburses on average 55 cents by contract of every dollar of care to the provider and the private insurance plans by contract reimburse an average of 85 cents per dollar of care, how can it be considered fair competition?

Answer: A health insurance exchange is essentially a marketplace where you could go online and you'd have a menu of options, most of them private insurers -- Aetna, BlueCross BlueShield -- insurance companies that wanted to participate, and they would list a range of plans just as members of the Senate go to this exchange for federal healthcare -- for federal employees, and they select which plan works best for their families. We want everybody to be able to access that and choose which plan works best for them. If they can't afford it, even though we'd have a lot of bargaining power, we'd be able to get the same kinds of rates that really big companies are able to get or the federal system is able to get, some people will still not be able to afford it, and then we would provide some subsidies. There would be certain rules governing any insurance company that's participating: You couldn't exclude for preexisting conditions; you couldn't have a lifetime cap; you'd have to limit out-of-pocket expenses. All the insurance rules that I talked about, that would be part of the deal if you as an insurer wanted to sell insurance through this exchange.
The argument around public option is: Should one of the choices on that exchange be a public option? And the idea here would be that a government-run not-for-profit would have its own option that people could sign up for and if it could keep its costs lower and provide a good-quality service and good benefits. That would help keep the insurance companies honest -- as a not-for-profit, potentially with lower administrative costs do a good job.
Now, the insurance companies have come back and said, well, that's not fair, because nobody can compete against the government. They have a legitimate point if what's being done is the government is subsidizing that government plan -- essentially taking taxpayer money and saying, here, we'll just keep on spending money regardless of whether you run a good operation or not, then it's hard for insurance companies to compete against that. And by the way, it would be wildly expensive for taxpayers. A public option can only work if they have to collect premiums just like a private insurer and compete on a level playing field. That's point number one.
The second argument is that, if the public option is reimbursing at Medicaid rates that are substantially lower than what private insurers have to negotiate for, private insurers might be run out of business. What's happened in the House bill, as its been modified, is they've actually said we're going to negotiate rates; they won't be Medicaid rates.
A third argument against the public option is that we shouldn't have government involved at all. Medicare is a government program that works really well for our seniors and has protected people. The cost of Medicare inflation has actually gone up at a slower rate than private insurance. This is about the narrow issue of the public plan. It's not about eliminating private insurance.

Question from the audience: We all know the best way to reduce prices in this economy is to increase competition. How in the world can a private corporation providing insurance compete with an entity that does not have to worry about making a profit, does not have to pay local property taxes, and theyre not subject to local regulations?

Answer: It is true that there are certain costs associated with a private business that a government would not have to worry about; you mentioned a couple of them. It's not just, by the way, property taxes; it's also things like just the cost of capital. In terms of the cost of borrowing, a public option -- insurance companies have to have a lot of money on hand and it's conceivable that a private entity that's having to pay a certain interest rate for their money would be really undermined if the government is able to get money much cheaper implicitly because Uncle Sam backs this operation.

This is actually a legitimate debate. I think that we can craft a system in which you've got a public option that has to operate independently, not subsidized by taxpayers -- it would be nonprofit, but we've already got nonprofits out there like BlueCross BlueShield -- that they would have to go on the market and get a market price for capital, so they wouldn't be able to just have the Federal Reserve write them a check. I think there are ways that we can address those competitive issues. And you're absolutely right, if they're not entirely addressed, then that raises a set of legitimate problems.


But the only point I wanted to make was the notion that somehow just by having a public option you have the entire private marketplace destroyed is just not borne out by the facts. And in fact, right now you've got a lot of private companies who do very well competing against the government. UPS and FedEx are doing a lot better than the post office.
You have a bunch of countries that have systems in which government is involved but you still have a thriving private insurance market -- The Netherlands being a good example.


http://www.calbrokermag.com/InsiderNews.html

:patriot:
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dflprincess Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:54 PM
Response to Reply #12
26. "That would help keep the insurance companies honest -- "
I will never understand why, when Obama and others admit the insurance companies are crooks, they are so determined to protect them.
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customerserviceguy Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:53 PM
Response to Original message
14. Frankly, my worry about the public option
goes in a different direction. I see the public option as becoming a dumping ground for people who become too expensive for the private companies to insure. Oh, yes, there will be all kinds of laws mandating that private insurers have to cover very ill people, etc, but all they need to do to get rid of them is to provide really lousy service to those folks. Eventually, they'll migrate over to the public option.

The public option will always have enough money provided by Congress so that it doesn't have to go belly up, so it will always be the insurer of last resort for people who get inconveniced out by the private companies. They will always seek out younger people who will not be a drain on them, and they will do quite nicely with a public option as the place they can refer out their least profitable (or most loss-inducing) customers.

That's why we need single payer.
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quantass Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 06:37 AM
Response to Reply #14
35. But lets not forget one thing...
If your scenario turns true then it gives the public option an advantage in that they will have a large base of insured where they then can use them to bring down costs through negotiations. The more the private turns people away and the public picks them up the more it looks bad for the private and the more successful public becomes. In the end the public option will be really a vailed single-payer to-be. Things would be ripe for the butterfly to break from its cocoon.

Let your scenario happen...it WILL bring single payer
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customerserviceguy Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 08:47 AM
Response to Reply #35
38. "Looks bad for the private" ???
Looks bad to who? The people who stay with the private because it can keep premiums down by shedding expensive customers? The stockholders of the private company that see profits going up?

I guess the public option may have negotiating power because it will be buying a LOT of stuff if the private companies manage to shake off their money losers to the PO. But that doesn't mean it will be better off having to buy 1,000 doses of a rare, expensive drug for 10,000 people, when a private insurer will only have to buy 100 doses for every 10,000 of it's insured. Even if the public option company gets the drug for half of what the private companies pay, they're still going to have better balance sheets.

Success for a private option will not be measured solely by how many very sick people it attracts. It will be measured by how many healthy people not needing bucketloads of expensive care it attracts.
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ipaint Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 09:58 PM
Response to Original message
16. I agree.
In addition, lower cost/better coverage is the key to lowering prices across the board. I am convinced whatever emerges will be a watered down, neutered piece of crap option offered to those lowest on the economic ladder. It will fail.

The comfortable middle class will have to lose more before they come around to doing what is right for all, down to the poorest person, instead of just what is good for themselves today.
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geek tragedy Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:02 PM
Response to Original message
17. "Level playing field" means no taxpayer subsidies.
It would be free to offer better coverage at lower cost. That would be the entire point.
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RandomThoughts Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:43 PM
Response to Original message
22. You make a point. Your statement is that public option will be less cost efficient then private.
Edited on Sun Aug-23-09 10:50 PM by RandomThoughts
The private sector in theory lowers price by refusing care. A public option that does not have agencies finding ways to deny care would pay for more care, so would require more premiums. I think that is your argument.

I think that is your point, quite simply that a public option could not provide better care at a lower cost. I assume you state that lower premiums occur from people not getting care after getting sick. Or some of the other methods of private companies like preexisting condition limitations.


There is an argument that the 4% overhead of public systems, compared to 30% overhead of private systems would make up that difference. Also streamlined billing systems would lower the need for many costs. It is presumed that internal divisions of insurance companies that deny care have to show a profit, where labor spent on denying care has to cost less then money brought in for denying care. So your argument has a statistical basis, since denying care would have to be profit generating, even after overhead, to exist in the private sector.

A public option would have 25% more dollars to spend on care, however it would also spend more on health care. It is possible that the private sector could lower its profit margin, to underbid public option. In other words it could lower its prices. Many times companies with monopolies can use that monopoly power to run a competitor out of business. If the private sector was seen to be using monopoly control to price set, run at a loss, just to lower its cost and defeat the public option, that would be an anti-trust issue. And that is the argument against the public option being cost neutral. Although you don't hear that argument since people are not suppose to think about stuff like that. Now since the Insurance companies have not had to face anti-trust issues for many years, it does not seem correct for them to make that argument against government.


It has been said that the public option is only part of the reform, that is very true, things like not discriminating on pre existing conditions, and not being able to dump people after they get sick enforced on the private plans are also essential, so they can't treat the public option as a dumping ground for higher cost citizens. Also ideas like not paying for redundant tests, or paying for results of care, not how many tests can be given can increase care by moving the motive for profit. The reforms also contains measures that limit how people providing insurance for health care can give or deny coverage of people. Those parts of regulation stop some practices that generate profit at the cost of suffering, and those things would raise price if profit margin stays the same. So a mandatory insurance of all increase pool size to lower extra cost at emergency rooms and provide a bigger pool is the counter to that cost increase.

You can see a balancing of not denying care, and adding more people to the system as a way to lower cost and get better care. However that assumes the private sector wont just take those extra savings as profits. There is no system in just those two facets to push the private sector into a lower overhead model outside of group price setting, or no free market controls on the system. Reform saves money, Insurance companies take that money as higher profits, without public option that would be the action, since nothing would be pushing back on that action. The increase of health care profits while cost also increase show that there is not a societal competitive pressure. Also payments outside of moderation show that competition is not in effect currently.

To be honest, the free market solution to the health care problem would be to break up the corporations. The public option is combating monopoly with another system that has monopoly powers enforced by laws.

It is very true that along with competition, the sector needs regulations. In that it is true that the public option is only part of the legislation. But those other parts are not disputed as needed. If you look at it in three parts, you get one that stops insurance companies from denying care. That raises prices. Then you get one part that mandates coverage that lowers prices. and you get a public option that keeps insurance companies from just making any profit they want, which they do by having similar profit margins and bonus structure.

Their are other issues, when a public plan is in the mix, many times people like to just bill that public plan as much as they can. Many times public sector programs do not worry about cost, having the public plan aware of its cost keeps it more efficient. However for the need of society, and to care for the sick in a society sometimes there are price limits on services. So that not any price can be charged for a service, one way that is done is with price limits such as medicare has to set pricing limits on services.

There are certain controls in medicare that make it a workable public plan regarding pricing. Those items are in place so private hospitals do not just charge the public plan any amount of money. Page 121 of the house bill seems to have the same system so that pricing of certain services have limits on costs within the public option.
http://energycommerce.house.gov/Press_111/20090714/aahc...

If hospitals in vertical monopolies wanted to charge more for a public option person then a private policy person, you would see the use of monopoly control to defend against the competition that the public option would provide. In that case vertical monopolies would have to be examined. Which is why negotiation of pricing by the public system is part of a plan. By not allowing any price charged to public option, it keeps its premiums down. That negotiation in the house bill seems to be similar to how medicare rates are negotiated.

It seems that is the argument of competition being made against the public option. If they set prices then they can keep down cost and do not compete. In a pure money world that is correct, their is a fudged competition in the pure money world. But since the current Insurance sector has not had any of its monopolies challenged, nor have they disliked the advantage of their monopolies, they really can't argue, since them setting profit margins for high pay is no different then a government setting a price forcing a lower pay. I am seeing some moves into more competition in other sectors, and with a free market competitive system it is possible things would not require as much government intervention.

To be completely honest, the private sector solution is actually to break up all the big companies, that is really the free market solution, but since the right wont really go for breaking up all corporations, adding a public system along side the corporate system is the other method. If the private system will not work within free markets, then they have no justification for a system people like limiting their profits. If you view it from a money perspective that is the best conclusion. however there is more to it, like should the profit motive be the determiner in areas where making profit goes against social good.

Also, when many people speak of competition they only think of what makes money. They think of all competition as what brings in the most dollars for some group of shareholders. Part of the competition of the public plan is how a people get treated in a society, and part of that can be less profitable and paid for by complex adjustments to some of the flaws of top heavy extreme capitalism profits. Medicare pricing limits profits, because those profits have not shown they are beneficial to society in an acceptable way to society. If you do not just think about money, then you can limit a profit for better social outcomes, part of that limiting is price negotiations, where pricing can make profit but not just as much profit as some group wants, since in those groups no amount is never enough, and always leads to collapse.

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QC Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 10:50 PM
Response to Original message
24. That's the whole point. "Well, we tried a public option, and it didn't work."
{Wipe crocodile tear from eye}

"Now it's clear that only the free market, assisted by generous taxpayer contributions to private insurance corporations, can provide health care."
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johnaries Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 12:12 AM
Response to Reply #24
29. If that were true, then Republicans would be for it, not against it.
And so would the insurance company lobbyists. And the astroturf movements. We would never have heard of "death panels".
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QC Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 01:42 AM
Response to Reply #29
31. Each side can pander to its constituency while still accomplishing its real goal:
protecting the corporate interests.

Statecraft is mostly stagecraft, you know.
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paulk Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 04:36 PM
Response to Reply #29
47. if the Democrats pull this off they will have the health insurance
industry money flowing into their pockets for a long time.

Maybe that's why the Republicans oppose it.
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 11:57 PM
Response to Original message
27. Once again ..... Some seem to be missing the bottom line, the main point.
Edited on Mon Aug-24-09 12:08 AM by Better Believe It
If public health insurance can't provide better coverage with lower premiums than private health insurance why in the world would any employer or private individual want it?

I and my wife sure wouldn't want it. And her employer sure wouldn't want to switch.

So why even have public insurance if it doesn't have a clear advantage over private insurance? The insurance industry worries about public insurance having an "unfair" advantage. If a public option is passed, they "prefer" a very weak public option that won't threaten their profit interests. We on the other hand, need a strong and robust one that has the power to put the squeeze on them!

If every employer and individual isn't eligible to join the public plan how will it benefit most people? The clear answer is, it won't! And that's why the public plan needs to be open to everyone.

Some progressive organizations and individuals support the public option because they believe and hope it will open the door to single payer Medicare for All by putting the private medical insurance industry out of business.

I don't know if they are right. I hope they are. But, if they are correct, that would be the main reason to support a strong public option.

So long as the private insurance industry and drug cartel control our healthcare we will never have high quality universal health care for all and our health standards will continue to decline while the health care industry profits at our expense.
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quiller4 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 01:18 PM
Response to Reply #27
40. Would you go for lower premium same coverage? I would.
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 02:28 PM
Response to Reply #40
46. If it's a lower premium for the same coverage as a private plan .... sure!

But, I think a viable public plan can not only offer lower premiums, it should be able to offer better coverage for less cost once it gets rolling.

But what employer or individual wouldn't want to switch to public insurance that provided the same benefits with lower premiums than private insurance?

That's the bottom line.
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johnaries Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 12:08 AM
Response to Original message
28. I strongly disagree. Even on a "level playing field" it has advantages.
Non-profit so it doesn't have to pay shareholders. Also, since insurance companies actually make their money on investments, no dependency on the stock market. No CEO's making $100,000 an hour. No advertising or marketing costs.

This all adds up to a huge advantage over private companies.
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Juche Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 01:38 AM
Response to Original message
30. Medicare is cheaper and has higher satisfaction ratings than private health insurance
Medicare spends less on overhead and enjoys more support among its benefactors than private insurance does. So a strong public option based on medicare would have those same benefits.
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John Q. Citizen Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 01:27 PM
Response to Reply #30
44. Medicare reimburses care providers at lower rates than private insurance.
The "level Playing field" written into HR3200 means they can't do that. So it won't be cheaper.

The "public option" in both the HR3200 and in the HELP bill are extremely weak and they have been gamed by the insurance industry so they will fail. We need much better.
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quiller4 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 03:25 AM
Response to Original message
32. A "level playing field" only means without subsidy. A public option
has to pay for itself covering all costs but it doesn't have to return nearly $.20 on the $1.00 to greedy stockholders. Neither does it have to pay obscene salaries to CEOs.
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John Q. Citizen Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 01:32 PM
Response to Reply #32
45. It also prohibits lower reimbursements. Medicare pays less than private insurance.
If you read the bills and read the analysis of the CBO, you will see the the so-called public options in both the HELP committee bill and in HR3200 are woefully weak and aren't going to save anybody a dime.

They are kind of a joke, compared with what the public option was advertised as.

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dionysus Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-24-09 09:59 AM
Response to Original message
39. year other things that are doomed to fail as well.
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