Today I sent the following message to President Obama at the White House:
Re: Keep the public plan in health insurance reform, please
Dear Mr. President,
It's Sunday, Aug. 16, 2009, and as I was sipping my morning coffee I was pondering whether to donate money to Organizing for America in support of your health care reform program. I thought I'd first send a message to you saying I feared that as soon as I did so, you would back away from the public option which I feel is a sine qua non of reform.
Before I composed that message, I signed on to Yahoo! and learned that your Health and Human Services Secretary, Kathleen Sebelius, has on this very day, on CNN's "State of the Union," floated backing away from public insurance.
I'm oh-so-strongly opposed to that. As John Holahan and Linda J. Blumberg of the Urban Institute's Health Policy Center wrote in "Is the Public Plan Option a Necessary Part of Health Reform?":
"Due to the controversial nature of the public plan option, policymakers are considering alternatives that could be considered as possible compromises between liberals and conservatives. These alternatives include reducing the market power or ratesetting power of the public plan or creating nongovernmental, nonprofit entities that could produce their own insurance plans with negotiated provider payment rates. While these options are likely to have political appeal, it is important to recognize that the cost-containment potential of a public plan rests fully in its ability to leverage the power of the federal government as health care purchaser to encourage provider participation and reduce prevailing payment rates. Without taking advantage of that strength, the cost-containment potential of the public plan option or an alternative would be tremendously weakened."
Citing Mr. Holahan and Ms. Blumberg, a recent Washington Post article (Friday, August 7, 2009), "Democrats Weigh the Cost of Public Insurance," makes the point that:
" ... a public plan is essential to fiscal responsibility in a country where health-care spending has soared to $2.4 trillion per year. A public option such as that proposed by House Democrats, with prices initially set at 5 percent above Medicare rates but well below private insurer rates, would inject competition into markets that are now oligopolies: An American Medical Association study found that a single insurer controls more than half the market in 16 states and a third of it in 38 states.
"This competition, the thinking goes, would drive insurers to demand that medical providers find more cost-effective ways to deliver care, leading to innovations and the spread of well-integrated networks of salaried physicians in place of the costly fee-for-service approach that predominates today.
"As it stands, insurers can pass along rising medical costs in the form of higher premiums. But with a public option in the mix, providers would work with insurers to lower costs to keep the private insurers from going out of business. Providers would probably have little choice but to accept the public option but would not want it to gain too much of the market. Medicare does not offer this competitive dynamic because it covers only the elderly. ...
"The economists in this camp say a public option would not underprice insurers so aggressively as to drive them out of business — political pressures from medical providers would restrain Congress just as it is restrained today from limiting Medicare rates too much. Private insurers could still compete on service and would benefit from their deep ties in local markets.
"But the public plan would produce savings, [economists like Mr. Holahan and Ms. Blumberg] say. The Congressional Budget Office estimates that the House's public option would save $150 billion over the first 10 years. Without it, these economists say, the government would have to save money by cutting subsidies to the point that people would be unable to afford the coverage that they're required to buy."
Secretary Sebelius said on CNN that public insurance is "not the essential element." Mr. Holahan and Ms. Blumberg suggest that it is. I think Mr. Holahan and Ms. Blumberg are right, and Secretary Sebelius is wrong. For your administration to cave in on the public option is, I believe, pandering to the political right in hopes of getting a half-a-loaf reform bill passed ... and it will keep me from making that donation to Organizing for America. It will also end my erstwhile tendency to give you my strong, unwavering support in the various fights, such as that on climate change, that lie ahead on today's political agenda.
You can get my unwavering support back, Mr. President, but only if you back away from today's backing away, so to speak.
If you, like me, support health insurance reform that includes a government-run public option, I urge you, too, to write to President Obama at the White House and tell him so.
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