Wednesday, September 30, 2009

Snowe and Pingree on a Horse in the Desert

Maine's leading ladies on healthcare, Senator Snowe and Congresswoman Pingree, are both right. We can't have a public option and we must have a public option.

The public option Senator Snowe voted against and will continue to vote against would create a government bureaucracy to produce a taxpayer-subsidized insurance product. This big, brand new entitlement program would unfairly compete with private companies and therefore stifle innovation and market driven efficiencies. This behemoth would be invincible and forever defended by a Congress that hopes to be re-elected.

The public option that Congresswoman Pingree wants to vote for is a government entity that can provide some level of competition in Maine to drive down costs and pull more people under the insurance tent. This new entity would not be powered by the corporate profit motive that denies people with pre-existing conditions coverage, and puts caps on benefits. There would be no marketing campaigns, excessive administrative costs, or fat cat CEO's sucking up all the money so costs would be reduced.

Many people have drawn their line in the sand. Public option! No public option!

In my view, the words are getting in the way of a solution.

Let's pretend for a moment the phrase "public option" is extracted from our minds and linguistics. Poof!

The problem, simplistically stated, is we are a capitalistic, democratic, wealthy society with sky-rocketing healthcare costs, mediocre healthcare, and lack of affordable insurance. The causes are, among other things, a pay-for-service medical system with patchwork, state-by-state insurance regulation. The solution is a national policy that will regulate the insurance market, and fundamentally change the way doctors and hospitals are reimbursed for their services.

Let's look at Maine for example. One could argue that with great intentions Maine adopted policies to mandate minimum standards in the insurance market. Insurance companies were forbidden to deny coverage on the basis of pre-existing conditions, for example, or discriminate on the basis of gender. These laws to help consumers made making a profit harder in Maine so many companies left the state.

Maine designed a public-private insurance partnership to offer coverage to uninsured’s, and also to improve the quality and cost-effectiveness of care. Problem is it costs too much and therefore covers too few people. The program lacks the purchase power needed to bring down costs or change behavior.

Republicans in Maine routinely offer as a solution intra-state insurance markets. "We need competition in Maine! Why can't I buy my health insurance plan from New Hampshire where everything is cheaper?"

For starters, no states allow consumers to buy and sell insurance across state lines. Insurance is regulated in every state, so the states with the least restrictive regulations can attract many companies. Some might call this a race to the bottom. Some might argue having a "choice" in other states among several very poor plans doesn't address the problem.

If instead of state regulated insurance markets there was a national policy that made it illegal to deny coverage for pre-existing conditions, to have caps on benefits, and to cancel coverage because the consumer has the audacity to actually invoke it, people would benefit. If this national policy created a non-profit regulatory board that changed the reimbursement model to incentivize preventative care, and could oversee a competitive national market, businesses would benefit.

Who cares what we call it!

1 comment:

realsister said...

If it doesn't have a real public option, it isn't health insurance reform. What is so complicated about Medicare for all?