Health Care Reform: In Defense of the "Public Option"

It's time to come to the defense of the public option, and define what it actually means. Maybe it should be labeled the "non-private-insurance" option, or even the "Medicare-lite" option.

Many Americans are put off by the label "public option." Many interpret this to mean a plan that is not only controlled by the government, but also PAID for by the government (and hence the taxpayers). As is currently written in pending legislation, there is some truth to the latter assumption. However, government funding certainly is not a requirement for a public option.

The simplest, most basic public option wouldn't cost the public a dime (except for minuscule administrative costs.) It would allow enrollment of any willing American in a Medicare-type plan if they were willing to pay a premium equal to their average age-adjusted annual cost of medical care. In other words, they'd be paying their entire average cost of health care, with the government paying only for the small administrative cost. For those in younger age ranges, that cost will be much lower. It may well be in the $3,000 to $5,000 year range, as current average Medicare costs are based on the older, over-65 population. This public option plan would not enroll everybody, and maybe not even most everybody. But it would offer a much cheaper option to a lot more people—significantly less than is offered currently by private insurance companies. And again, save for the minuscule administrative costs, it wouldn't cost the government or the taxpayers a dime. The best way to label this program would be "Medicare-lite."

And it's possible to lower premiums even further by increasing co-pays, to say 30% from Medicare's 20%. This could be labeled "Medicare 70-30," and premiums could be lowered accordingly to reflect the increased per-visit payments by patients, and for the reduction in visits caused by the 30% co-pay. This could even be carried a step further, to a "Medicare 60-40" option, where co-pays would be 40%. And here again, the premiums could be lowered accordingly.

The goal here is to insure as many patients as possible, reduce the cost of premiums, and allow patients the choice of how much medical care they're willing to pre-pay for with their premiums.

We could also add a relatively high price drug benefit for those that demand one. In general, it's best to discourage younger patients from doing this, as most necessary meds are available as generics, at a fraction of the brand name price. And having patients pay the full cash price for drugs would make them advocates of generics, and would help drive down drug prices since private individuals will not be willing to pay as much out of their own pockets as do insurance companies. (Besides which, insurance companies often obtain huge discounts on drugs—discounts that are NOT available to the public. For example, in the 90's I worked for an HMO that paid only $2-$6 per month for multiple oral contraceptives that sold for a cash price of $25-$30/month in drug stores.)

As I stated in an earlier post, treatment for most major chronic disease could easily cost less than $10/month, if generics were used wherever possible. And those prices would fall further, if they were subjected more to the market forces of private, cash-paying patients, and less to the 3rd party insurance market.

Up to this point, these Medicare-lite options require little additional taxpayer funding. At the same time, they DO offer considerable choice to Americans who have no insurance at all, as well as those who have high-cost, yet low coverage private insurance. These Medicare-lite plans offer enrollees a chance to actually get what they pay for—instead of a lot less, like they do with the high-priced, low-coverage care offered by most private insurance companies.

This Medicare-lite type plan is the essence of a public option. It is paid for by enrollees and administered by the government, while completely eliminating the "cost" of insurance company profits from the picture.

And yet even here, private insurance companies would not be eliminated. They'd just be forced to compete with a non-profit-driven entity, whose cost reductions and savings would be reaped entirely by enrollees, instead of insurance company management and shareholders. Patients would get as much coverage as they were willing to pay for—but not less, as is currently the case with private insurance.

"It's just regular health insurance, but instead of buying it from a private company, you buy it from the government. It won't eliminate private companies, but it will compete with them and that should bring down prices ... and then you won't have to pay so much out of your own pocket."

It seems to calm them down. :-)

edited:typo :blush:

It appears that many people don't see it the way we see it.

There could easily be a "public option" that costs taxpayers $0.00.

According to the press, it is the public option that is putting off the Blue Dog Democrats. There's even an letter that was allegedly signed by the Blue Dog Democrats, but most of the signatures are illegible.

How come it's always the progressive side that has to give up something? Progressives wanted single payer, so the public option IS the compromise. Now the Blue Dogs want to eliminate the compromise? :grr:

I have to wonder what motivation and support the Blue Dogs are receiving to oppose this particular part of the bill.

The Public Option should be the one item any Democrat could support, even if you dislike everything else about the bill.