Yes, Virginia, there really IS a (rapidly-increasing) possibility of a healthcare insurance public option. The private insurance companies are inviting it.
When millions of health-insurance plans were canceled last fall, the Obama administration tried to be reassuring, saying the terminations affected only the small minority of Americans who bought individual policies.
But according to industry analysts, insurers and state regulators, the disruption will be far greater, potentially affecting millions of people who receive insurance through small employers by the end of 2014.
— Second wave of health-insurance disruption affects small businesses, Ariana Eunjung Cha, Washington Post, today
[W]ith the single exception of the disastrous rollout of Healthcare.com, which is purely a technology issue, the high-profile issues concerning Obamacare since Oct. 1 highlight not generic problems with government involvement in healthcare insurance but instead the problems of a system that piggybacks on the for-profit private insurance industry and neo-federalism-structured federal programs that rely heavily or entirely upon cooperation of state governments.
— What to Do When a High-Profile U.Chicago Economist Says the Airline, Telephone and Package-Shipping Industries Prohibit Use by Preexisting Flyers, Callers and Shippers: If you’re a liberal, take this ball and run with it!, Me, Angry Bear, Dec. 26
The Washington Post article goes on to say that many of the small-business cancellations are occurring not because the current policies are substandard under the ACA, but instead are only indirectly related to the statute. Insurers, the article explains, want to “move customers to new plans designed to offset the financial and administrative risks associated with the health-care overhaul.” To that end, “they are consolidating their plan offerings to maximize profits and streamline how they manage them.”
To which I say: Go for it, insurance industry. Please do. In my Dec. 26 post, I wrote:
[W]hat’s happening, suddenly, is something I predicted in recent posts here: That the individual-market insurance industry’s fall-of-living-dangerously, during which (led apparently by the various Blue Cross companies) it drastically overplayed its hand in the last three months by, for example, telling premium-holders, falsely, that their cancelled policies could be replaced only by vastly-more-expensive policies, would trigger reinvigorated calls for a “public option for the single-payer market and maybe even for a single-payer option across the board.
But something else is happening, as well: The right is recognizing that the problems with Obamacare, rather than broadening the appeal of a return to the status quo, is instead more likely to dramatically broaden the appeal of a public option. And, because employers that provide healthcare coverage are scapegoating Obamacare for their unrelated decisions to further limit their already-increasingly-limited premium contributions and the like, the formerly unthinkable–a single-payer-for-all option–may well soon become the very thinkable.
The “right,” in that last paragraph, refers to U.Chicago Business School economist John Cochrane and a recent article of his that my post’s title summarizes. Cochrane’s piece, an op-ed published in the Wall Street Journal titled “What to Do When Obamacare Unravels,” struck me as bearing the earmarks of rightwing desperation.
Late this month in his State of the Union address, Obama will discuss Obamacare. He will use the tired-but-by-now-obligatory tactic of having real Americans in the audience, whom he will name and whose family is benefiting tremendously from the law. He may even be astute enough–although I doubt this, since astuteness is not his thing–to include among those Americans people who panicked after receiving cancellation notices from one of the Blue Cross affiliates (it’s virtually always one of the Blue Cross affiliates, usually but not always an AnthemBlueCross affiliate) and was profiled in some news article as being told in the cancellation letter that the only option henceforth was some poorer-coverage or wildly-more-expense (or both) policy, only to learn later about the actual options.
What he won’t do, though, is what most he should do: Explain, in actual detail, using genuine specific data depicted in charts, that for decades now the unremitting and rapidly-accelerating trends in healthcare insurance have been ever-narrowing provider networks and large increases in premiums and out-of-pocket costs in both the individual market and the employer-based group-insurance market. And to say that it soon will be clear whether or not the private for-profit healthcare-insurance market can meet the needs of the general public or whether instead those needs can be met only through a government-run single-payer insurance system or some other non-profit system similar to one or another approach that works so well in, say, Australia, France, or Germany. And then propose a public option, not just for the individual market but also for employer-based group insurance.
No, Obama himself won’t propose this. But progressive Democratic congressional candidates should, and soon. Obama, like most Washington pols and almost all political pundits, is always incredibly late to the change-in-progressive-and-mainstream-political-winds party. If he ever arrives at the party at all. (He’s still appointing federal judges whose main credential is a history as a prosecutor or some other tough-on-crime, pro-police background–he hasn’t noticed that this no longer appeals even to Republicans, at least not those of the libertarian variety–but that’s a subject for a later post.) The Washington Post piece notes that most of the small-business-group policy cancellation notices will be sent in October, near the start of the open-enrollment period and also just before the midterm elections. This, the writer points out, “could be difficult for Democrats who are already fending off Republican attacks about the Affordable Care Act and its troubled rollout.”
Then again … maybe not so difficult, after all. The political winds are moving forward, not backward. All the Dems need is a coherent progressive policy proposal. And a few coherent messengers for it, who no longer need fear that they will be killed.
Where was Cochrane for the eight years from January 2001 through January 2009, with Republicans controlling the Presidency, Congress and the Supreme Court for six of those years? Was he tearing his hair out because Republicans were doing absolutely nothing to fix the gigantic dysfunctionality of our healthcare and health insurance systems, leaving millions of people with crushing health or financial burdens due to a medical condition? Or is he a johnny-come-lately who gets religion about the need for reform only when Democrats succeed in putting it in place?
Another question: is there the slightest chance in hell that Cochrane would have been doing critical op-eds about this Republican-inspired plan barely acceptable to the insurance industry had it come out of the bush administration? We can be pretty sure of the answers to these questions, so the next question is how big a phony John Cochrane is ?
I am all in favor of a public option, but the mechanics are not simple.
If a public plan has all the same mandatory benefits as the ACA, and if no one is turned down for pre-existing conditions, then public insurance will be fairly expensive.
Stripping out insurance company profits is OK by me, but that in itself will not lower the premiums drastically. I was involved with a small public plan called Minnesota Care — it was utterly non-profit and paid doctors at Medicare-like rates, and it was not cheap insurance.
So the public option will have to have subsidies. And this will mean either higher deficits or higher taxes, depending on the honesty of Congress.
That is where the political rubber meets the road. Even good Democrats may fold if the public option requires higher taxes.