Did you know the public option can help us all?
By RICARDO ALONSO-ZALDIVAR, Associated Press Writer Ricardo Alonso-zaldivar, Associated Press Writer – Sat Aug 22, 9:45 am ET
WASHINGTON – One of the most widely accepted arguments against a government medical plan for the middle class is that it would quash competition — just what private insurers seem to be doing themselves in many parts of the U.S.
Several studies show that in lots of places, one or two companies dominate the market. Critics say monopolistic conditions drive up premiums paid by employers and individuals.
For Democrats, the answer is a public plan that would compete with private insurers. Republicans see that as a government power grab. President Barack Obama looks to be trapped in the middle of an argument that could sink his effort to overhaul the health care system.
Even lawmakers opposed to a government plan have problems with the growing clout of the big private companies.
"There is a serious problem with the lack of competition among insurers," said Republican Sen. Olympia Snowe of Maine, one of the highest-cost states. "The impact on the consumer is significant."
Wellpoint Inc. accounted for 71 percent of the Maine market, while runner-up Aetna had a 12 percent share, according to a 2008 report by the American Medical Association.
Proponents of a government plan say it could restore a competitive balance and lead to lower costs. For one thing, it wouldn't have to turn a profit.
A study by the Urban Institute public policy center estimated that a public plan could save taxpayers from $224 billion to $400 billion over 10 years by lowering the cost of proposed subsidies for the uninsured, while preserving private coverage for most people.
"Right now, there's no incentive for insurers or big hospital groups to negotiate with each other, because they can pass higher payments on through premiums," said economist Linda Blumberg, co-author of the report. "A public plan would have the leverage to set lower payment rates and get providers to participate at those rates."
"The private plans would come back to the providers and say, 'If you don't negotiate with me, you're going to be left with only the public plan.'" Blumberg continued. "Suddenly, you have a very strong economic incentive for them to negotiate."
Insurers contend their industry is extremely competitive, and a public plan is unnecessary. About 1,300 carriers operate across the country, although many only have a small share of the market in their states.
"You can have a very competitive market and still have companies with a high market share," said Alissa Fox, a top Washington lobbyist for the Blue Cross Blue Shield Association.
Fox points to the federal employee health program, which also covers members of Congress. It offers a total of more than 260 options and 10 nationwide plans. Despite all the choices, about 60 percent of federal workers pick a Blue Cross plan.
"Insurers need to be of a significant size to best serve their customers and make sure that people get the best value," Fox said.
Nonetheless, lawmakers are concerned. Big insurers are getting bigger. Small businesses in particular have fewer and fewer options for getting coverage.
Congressional investigators this year looked at insurers catering to small employers around the country. The Government Accountability Office found that the median _or midpoint — market share of largest carrier increased to 47 percent in 2008 from 33 percent in 2002.
There's widespread recognition among lawmakers that a health care overhaul should foster more competition among insurers. The debate is over how far to go.
The basic framework lawmakers are looking at would encourage competition, even without a government plan. It calls for setting up a big insurance purchasing pool called an exchange. It would be open, at least initially, to individuals and small businesses. The government would offer subsidies to make premiums more affordable.
Consumers would find it much easier to shop for a plan through the exchange. For one thing, they would be able to readily compare benefits and premiums in different plans. Also, participating insurers would have to take all applicants and not charge higher premiums to those in poor health.
Offering the option of a public plan would supercharge the competition, supporters say.
Blumberg envisions a plan that pays medical providers more than Medicare, but less than private insurance. Her study estimated it could grow to 47 million members, leaving 161 million with private insurance. Even so, that would make the new public plan one of the largest insurers in the country, rivaling Medicare, Medicaid and big private companies such as Wellpoint and UnitedHealthcare.
It's a scenario that gives pause even to traditional adversaries of the insurance companies.
"The fear and concern is that the public plan could become the market-dominant plan," said Dr. James Rohack, president of the America
- ?Lv 51 decade agoBest Answer
Funny, how someone without a valid comment uses someone elses worthless commentary. Sad. But I expect nothing less from the left.
- Anonymous1 decade ago
The Republicans make two objections to the public option:
1 is that government can't do anything right and the public option will be unworkable and mismanaged and nobody will want it.
2 is that it will be cheaper so it will put insurance companies out of business.
These can't both be true, can they? The insurance companies are funding both sides in this argument. Neither side can do anything that might hurt their profits and their control over our health care.
But I see the public option as a win-win. If it's mismanaged and nobody likes it, it will die a natural death and people leave for commercial insurance. If it does work and provides cheaper health care, it will lead the insurance companies to lower their prices and accept a more reasonable profit margin. Or to go out of business and give us all the Single Payer system we wanted all along (60-70% of Americans prefer a single payer plan in poll after poll).
What's likely to happen is that all the people the insurance companies turn down will go for the public option. People with pre-existing conditions. The insurance companies don't want to insure them anyway. In fact the only reason we have Medicare/Medicaid in the first place is that the insurance companies didn't want to be bothered with the elderly, the poor, and the chronically ill. So we ALL pay for their care. But Medicare provides as good or better service, same outcomes, and BETTER customer satisfaction. If we just expanded it to cover everyone, we'd save hundreds of billions of dollars every year.
- 1 decade ago
The only thing that can help healthcare is ending the Total Medical Insurance fraud. Since a bulk of these politicians are all a buncha TRIAL-AMBULANCE CHASER lawyers and make their money off of these frivolous law suits.....
ANd the media is totally IGNORING this fact the past 30 years or so. THe Republicans have been BLOCKED constatnly in ending these practices. But lawyers stick together!
Make your own judgment of that.
- Anonymous1 decade ago
poor sweet sheep. and you think this is really going to happen.
this plan will only help the big union bosses. forget all that hallybooloabout health care.someone is feeding you bs as always you fall for it. and if this health care scam passes there will not be an option. Barry will manage to get rid of private insurance and private drs.
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- Anonymous1 decade ago
What you talkin bout willis? LOL JK! I see you changed your avatar. I don't think its a question of whether it will help us-most of us know that, its a matter of getting the facts of the matter out to people who don't understand. Which you have given. However, there will always be those who choose not to acknowledge it because they simply refuse to agree with anything Obama does. Oh well, their lost.
- 1 decade ago
if you believe it is good then move to a country where the government provides you with everything you need and tells you everything you can and can not do.
This though is America. land of the free. in this country I have the right to work, pay my bills and hopefully become successful.
I also have the right to not pay your bills.
- amazin'gLv 71 decade ago