Buh-Bye Public Option
The Obama Administration may be dropping the public option requirement from its health care agenda.
PHOENIX — The White House, facing increasing skepticism over President Obama’s call for a public insurance plan to compete with the private sector, signaled Sunday that it was willing to compromise and would consider a proposal for a nonprofit health cooperative being developed in the Senate.
Along with mounting skepticism President Obama has been seeing his poll numbers drop as well. Similar to what happened to President Clinton when he tried to pass health care reform the public backlash is causing President Obama to re-evaluate and re-trench.
The “public option,” a new government insurance program akin to Medicare, has been a central component of Mr. Obama’s agenda for overhauling the health care system, but it has also emerged as a flashpoint for anger and opposition.
Right, not like there is no savings to be had in Medicare…oh wait….
Second, reform will finally bring skyrocketing health care costs under control, which will mean real savings for families, businesses and our government. We’ll cut hundreds of billions of dollars in waste and inefficiency in federal health programs like Medicare and Medicaid and in unwarranted subsidies to insurance companies that do nothing to improve care and everything to improve their profits.
That was what President Barack Obama wrote in his New York Times op-ed this weekend. This immediately raises the question…why the public option? If we can save not just billions, but hundreds of billions by cutting waste, fraud and abuse in Medicare and Medicaid…why not do that first? Why not put out a bill for doing that separate of the public option? Could it be there is an ulterior motive? Hmmm, a politician being dishonest and misleading…nawww couldn’t happen.
I see this as a good move. President Obama has come out in favor of single payer health care like we see in Canada and England. The problem is that while on the accounting ledger both systems are cheaper, they also have had issues with waiting for procedures (more here and here). Given that health care resources are scarce and costs are rising quite fast in these countries making people wait for care for issues that are non-life threatening is a good way to control costs.
It is much like externalities. These costs are not represented anywhere really in terms of money. However, if a person is sitting at home waiting for treatment and is in pain, has diminished mobility, etc.—i.e. a diminished level of welfare due to lack of treatment it is still a cost for society. It really isn’t all that different than having an insurance company denying a claim again and again before finally paying for the care. The difference is that with an insurance company you can take them to court and ask the government to make a decision. With a government run health care system if the government tells you to go home and not come back for 12 weeks is complaining to the government going to get you very far?
The public option has never been essential. When looking at some of the more successful European models such as the Netherlands and Switzerland don’t have public options. The government is still heavily involved in health care, but the requirement is that individuals purchase health care from private insurance firms. And it was seen by many that the public option was a way to backdoor a single payer system. First introduce the public option, then down the road start subsidizing it and squeeze out the private insurers.