Weekly Pulse: The Push for the Public Plan

Healthcare reform is back in the news, as legislators and interest
groups spar over the promised public component of Obama’s healthcare

In very simple terms, this is a fight between groups with a vested
interest in expensive healthcare and everyone else. This week, the
American Medical Association warned Obama that a public plan could
restrict patient choice. But for millions of Americans, getting a
choice between healthcare and no healthcare would represent a 100%
increase in their healthcare options. Obama’s public plan would also
give people the choice of keeping their private health insurance. The
public plan is an additional option, not a diminution of options.

The AMA is a powerful interest group, but it doesn’t speak for all
physicians. Several prominent groups representing doctors and medical
students, including the American Association of Family Physicians, co-signed a declaration supporting Obama’s push for a public plan this week.

Expect the health insurance lobby to fight the public option tooth and nail, says economist Dean Baker in AlterNet.
It’s smart business from their perspective. Platitudes about the free
market aside, no real capitalist welcomes competition. As Baker points
out, a public plan represents competition to health insurance
companies. For every dollar Medicare pays to providers, it spends two
cents on administration. Whereas private insurers spend about fifteen
cents on the dollar in administrative costs. Baker estimates that if a
public plan were available, insurance profits would drop by 20-30%, all
things being equal.

Former president Bill Clinton invited about 20 progressive bloggers
to his Harlem office on Monday for a seminar-style discussion about the
work of the Clinton Foundation. Several staff from Media Consortium
member organizations were in attendance, including yours truly.
Healthcare was a major topic of conversation. Emily Douglas of RH Reality Check, who also attended the meeting, writes:

The former President observed that the
country, emerging from a "post-9/11 emotional straitjacket" has become
"more communitarian" – and that President Obama has fewer budget
issues, and less Republican opposition, to content with when attempting
reform.  But, most importantly, "everything is worse now" – health care
spending has doubled, more are uninsured, and disposable income,
adjusted for inflation, is down.

Clinton said that he’s optimistic about the prospects for healthcare
reform this year, but he encouraged Obama to drive a hard bargain with
congressional Republicans. All things considered, the former president
said, it would be better to pass healthcare with 60 votes for the sake
of the Obama administration’s long-term relations with congress. The
alternative would be to pass healthcare through budget reconciliation,
which would require only 51 votes, but which would incur a lot of
ill-will among Republicans. However, Clinton cautioned against writing
a weak bill to avoid reconciliation. In Clinton’s opinion, if we don’t
contain healthcare costs by moving to outcomes-based medicine and
making our healthcare delivery systems more efficient, the system will
be unsustainably expensive.

James Ridgeway of Mother Jones
has also been mulling the challenge of writing a bill that’s acceptable
to enough Republicans to avoid a budget reconciliation fight. Ridgeway
fears that sweeping structural reform will take a back seat to
political expediency. He fears that by trying to please everyone, Obama
could end up pleasing no one:

One disturbing possibility is that
health care could become a replay of the credit card legislation. The
pattern goes something like this: First, we get a propaganda blitz
heralding sweeping changes. But although the final legislation corrects
some of the most egregious abuses, it doesn’t change the system’s
underlying flaws. So, for example, insurance companies may be required
to cover people with preexisting conditions-a need Obama illustrated
vividly in his AMA speech with moving references to his mother’s battle
with cancer. We might see what the president called "more efficient
purchasing of prescription drugs," which presumably means faster
approval of generics and giving the government greater power to haggle
with Big Pharma over drug costs. We will likely see incentives for
health care providers to offer more cost-effective-and, hopefully,
better-treatment. These things are not meaningless, and they will
provide a modicum of relief to some struggling Americans. But they do
virtually nothing to strike at the deeper problems of the for-profit
health care system. And they offer only a fraction of the savings that
a single-payer system would provide.

If the healthcare debate sounds vague and abstract, that’s because
it is. There are several competing bills coalescing, but at this point,
there’s no overall vision for reform. Everything is up for grabs. Never
afraid to think big, Sen. Bernie Sanders (I-VT) is circulating a
petition for single-payer healthcare, with an assist from Chelsea Green.

Surely the weirdest healthcare story of the week comes from Tracy Clark-Flory of Salon: An
anti-choice blogger who claimed to be carrying a non-viable pregnancy
to term out of pro-life principle was exposed as a hoaxster when an
alert reader identified her "dead baby" as a doll. It’s not clear why
the 26-year-old social worker perpetrated the hoax. Jessica Valenti of Feministing injects a note of compassion for the perpetrator, "Though as angry as this makes me, I’m with Sadie at Jezebel
on this: ‘It’s tempting of course to use this as a chance to take an
easy bash at anti-choice, and revel in anything that makes them look
foolish, but frankly, I’m just sad for this woman.’ As am I."

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  • progo35

    Lindsay-many peiple, including those like me who support expanding coverage to insure access for peiple ho currently lack health insurance, are very concerned about the poible impact of a government run plan on patient choice, particularly as that relates to the issues of futile care imposition on patients whom the doctors fie as having little quality of life or whose care is expensive. You would do well to investigate these concerns in addressing the issue of a public plan. I’m sure that we, the America that fought back fascism and won it’s independence from the British, can come up with a plan that avoids medical rationing. But we must be careful that that is a priority for people in congress and that private options remain available, hopefully to override any possible rationing that could occur in a public system. Of course, even this won’t be perfect because poor people will simply be stuck being rationed out by the government. What would be the best approach would be to pass a law outlawing rationing all together along with setting up a healthcare system that does not practice rationing.

    "Well behaved women seldom make history."-Laurel Thatcher Ulrich

  • invalid-0

    Progo35, you seem to be one of the few rational people on this site.
    As other examples show us, rationing care has been by far the most common method of reducing costs in all govenment managed health care sytems. Why would we think that the organization that has manageed Medicare/Medicaid into insolvency could prossibly do otherwise if they were to expand goverment control into all areas of medical care? Einstein said that doing the same thing over and over again and expecting different results is the definition of insanity.

  • invalid-0

    As other examples show us, rationing care has been by far the most common method of reducing costs in all govenment managed health care sytems.

    It’s also the most common method of reducing costs in all privately managed health care systems, too!

  • invalid-0

    Health care reform is a clash between the public and insurance companies.

  • invalid-0

    When government rations care, it has to deal with voters. When private insurances ration, as they are doing right now, they only have to deal with unhappy customers, who, with their already pre-existing condition, don’t have the choice to go to another company. Therefore, most countries with government regulated medicine and a standard of living comparable to the United States, ration WAY less than most managed health plans.

  • invalid-0

    < ...When private insurances ration, as they are doing right now, they only have to deal with unhappy customers, who, with their already pre-existing condition, don't have the choice to go to another company....>

    They especially don’t have this choice when their insurance denies them coverage and they die.

  • invalid-0

    The private sector is always making the claim that it can do anything better than the public sector. Really?

    I don’t want the government building my house or opening a diner or making my shoes. But healthcare is ultimately a public good, and a public option (read: choice) can provide the impetus to force these bloated, lazy companies to actually compete. Let’s see them put their money where their mouths are and prove they can do better than the government. Of course, let the cons get in again, and they’ll make the government option weaker in order to say, “See the government can’t do anything right” a la FEMA’s intentional uselessness during Hurricane Katrina.

    I’d rather have a more comprehensive, effecient system like that of Canada, France, Germany, etc. But at the very least we need the public option. Everybody deserves to be covered, and there must be absolutely no pre-existing condition exclusions. Now that’s truly pro-life.

    “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America. (Preamble of the U.S. Constitution)

  • http://www.ourbodiesourselves.org/ invalid-0

    I urge everyone to read this Op/Ed that appeared in the Boston Globe last Monday.


    It discusses the positive impact that single-payer health care reform will have on both cost-containment and quality of care. It also points to the fact that the only bill for Health Care reform that includes reproductive health is a single-payer proposal that is sponsored by Representative Barbara Lee, a California Democrat.

  • invalid-0

    When I contact my legislators (two of three are Dems), I tell them the single-payer reform is optimal, and that Dems should have started with the best and strongest reform. I also tell them that Medicare’s prescription benefit must be reformed so that the government can negotiate better prices from Big Pharma and that any reform extended to everyone else must provide a way for single-payer reform at the state level. Remember when the Repubs always said that states were incubators of ideas and reform? Let’s make that happen.

    Here’s today’s NPR Morning Edition report on how the “wonderful private market” rations healthcare entitled “Insurers revoke policies to avoid paying high costs.” Of course, this transpires just before their insureds (all individuals who purchased their own policies instead of being part of an employer-based group plan) go into surgery. I would hope that sincerely pro-life people would support at least a stong public option if they can’t accept single-payer even though I believe it is a superior plan and more life-supporting.

    Morning Edition, June 22, 2009 · According to a new report by congressional investigators, an insurance company practice of retroactively canceling health insurance is fairly common, and it saves insurers a lot of money.

    A subcommittee of the House Energy and Commerce Committee recently held a hearing about the report’s findings in an effort to bring a halt to this practice. But at the hearing, insurance executives told lawmakers they have no plans to stop rescinding policies.

    The act of retroactively canceling insurance is called rescission. It happens with individual health insurance policies, where people apply for insurance on their own, not through their employers. Their application generally includes a questionnaire about their health.

    The process begins after a policyholder has been diagnosed with an expensive condition such as cancer. The insurer then reviews the health status information in the questionnaire, and if anything is missing, the policy may be rescinded.

    The omission from the application may be deliberate, to hide a health condition that might have made the applicant ineligible for insurance. But sometimes there’s an innocent explanation: The policyholder may not have known about a health condition, or may not have thought it was relevant.

    The rescissions based on omissions or immaterial conditions incensed many lawmakers.

    “I think it’s shocking, it’s inexcusable. It’s a system that we have in place and we’ve got to stop,” Energy and Commerce Committee Chairman Henry Waxman (D-CA) said at the hearing.

    From the other side of the aisle, Rep. Joe Barton (R-TX) was also appalled.

    “Doesn’t it bother you to do this?” he asked Don Hamm, CEO of Assurant Health, who appeared with the CEOs of UnitedHealth’s Golden Rule Insurance Co. and WellPoint’s Consumer Business.

    Losing Insurance At A Critical Time

    Hamm’s insurance company rescinded the policy of Otto Raddatz after he was diagnosed with lymphoma. Raddatz had not told the company about a CT scan by a now-retired doctor that showed gallstones and a weakened blood vessel.

    That’s because he didn’t know about the findings, his sister Peggy Raddatz, an attorney, testified. She spent weeks on the phone and ended up at the Illinois Attorney General’s office, which began an investigation. The retired doctor turned out to be off on a fishing trip.

    “Luckily, they were able to find the doctor, who was able to say, ‘Yes, I never discussed those issues with him; they were very minor,’ ” Raddatz testifed.

    After Minor Misunderstanding, A Policy Revoked

    One of Barton’s constituents, Robin Beaton of Waxahachie, Texas, did know that her health history included acne and a rapid heartbeat. But she didn’t think they were relevant to her current health and left them off her application.

    After she was diagnosed with breast cancer and was scheduled for a double mastectomy, her insurer cancelled her policy, leaving her devastated.

    “I had to completely refocus on what to do, where to turn, because my insurance canceled me,” she said. Beaton called Barton’s office, which started a series of phone calls to her insurer. It took a call from Barton himself to get her reinstated.

    Committee investigators found a total of 19,776 rescissions from three large insurers over five years. The rescissions saved the insurers $300 million.

    Insurers Say They Won’t Change Rescission Practice

    During the hearing, Barton asked Hamm how he felt hearing the three cases of people who’d been burned by rescission.

    “I have to say I felt really bad,” Hamm replied.

    “It’s my hope there will be changes made that this will no longer be necessary,” he said. His hope, and that of the other insurance company CEOs who testified, is that a health care overhaul will mean that everyone has insurance. If that were the case, people couldn’t wait until they got sick to apply, and insurers wouldn’t have to

    Several worry about whether someone had lied on an application. everal lawmakers at the hearing suggested there were things the companies could do right now: They could vet applications when they receive them, rather than waiting until people get sick; they could consider whether something that was omitted was related to a current health condition before rescinding; and they could be more careful to positively identify fraud before rescinding a policy.

    Rep. Bart Stupak (D-MI), who chaired the hearing, asked all three CEOs if they would agree to stop rescinding policies except in cases of fraud.

    All three said no. I

    f they don’t do something to stop it, said Barton of Texas, Congress will.