The Financial Times yesterday reported that the ordinarily low-drama U.S. President angrily denied that his health-care proposal is designed to put private insurers out of business.
Obama proposes to offer a federal health-care plan that allows anyone to
join a program like the popular Medicare. (Who says America doesn’t have single payer, national health insurance: caveat — it’s for people over 65!)
This plan would probably be better and cheaper than private health
insurance and that’s why the insurers are fighting the public plan option. Obama is probably right not all of them will go out of business, but it may hurt profit margins.
Obama’s public plan option is the best of three currently under most-prominent discussion.
1. The status quo: ration health care by not letting everyone have it. Problem: That creates back-door provision through emergency rooms, which is more costly than anyone wants.
2. Medicare type plan for all: ration health care like Medicare does, negotiating price and cover services only if they are tested to be effective.
And, the third choice:
3. What the private insurance companies and Republicans want: give people tax breaks and subsidies from taxpayers so they can buy private policies.
We can’t afford that third option — subsidize people to buy private policies — because you can’t have national health care without price and quality controls.
The proven way to control costs and maintain quality is to do what Medicare does: Get both with with bargaining power. It is the “make yourself too big to ignore” strategy.
The drug companies know that bargaining power thing and they are running ahead of their brethren in the private insurance field to cut a deal with Obama. They are voluntarily cutting costs by $80-billion. “Please, please Mr. President don’t put into law that the government can bargain with us — we will bargain for you!”
Yesterday the Commonwealth Fund showed what Obama’s advisers know, that a public plan competing with the private plans — even if it pays more than Medicare does — saves the nation trillions and most Americans get health insurance.
The Obama-Kennedy-Dodd health-insurance plan has a few months to pass; perhaps we will see even more flair from President Obama before the summer is over.
