Health Insurance: The Great Inequalizer
Having lived in Europe for three years (and having encountered public health there as many times [once being hospitalized for four days]), I saw both the best (a truly wonderful hospital in Southampton England where they fed me ice cream in a private room and didn't even ask for my signature on any paperwork) and the worst (an emergency room in Northern London where the staff were clearly overworked and clearly short on patience...but then again, that describes the emergency rooms in any major city I've seen), but all in all, I was convinced that Americans' fears of public health are moronically overdeveloped. It can work.
Metaphorically, public health options are like the subway or Central Park. They are great equalizers that help keep a Democracy well oiled. Sure it would be nice if everyone could be driven to work in their own chauffeur-driven limo, but even if we had the money for that, we certainly don't have the road. To keep the country moving, there are times when a nation's people must accept that it's not all about them individually. Indeed, if you need to wait your turn to see the doctor, like every other citizen, despite your 6-figure day job, you begin to have it sink in a bit more that you're all in this together and adjust other parts of your life accordingly.
Now the strongest argument against public plans for US health care reform is the fear (and it's a legitimate one, but not an insurmountable one) that should the government offer public health care as an alternative to private insurance (thereby eating into the uber-powerful insurance monopoly's profits), the insurance companies will respond by dumping even more high-risk clients off their rosters thereby increasing their own profits and overwhelming the public systems. Over at the American Prospect, Paul Starr has been arguing just this point:
The public plan will likely end up as a dumping ground for high-cost, mostly low-income people if the exchanges are open only to the individual and small-group market and have inadequate power to risk-adjust premiums or to regulate private insurers' marketing and benefit design.The only thing is (and again, if Americans would simply travel more or at least pay more attention to the rest of the world), other countries have already sorted out how to deal with this practice (called "to cream" ...as in taking the cream off the top of the potential client base and letting the government handle the rest), as Josh Marshall shares in a quote from one of his readers:
In other words, we could get a public plan that instead of "disciplining" private insurers, as the president said last week, actually buttresses their dominance of the system. Watch what you wish for.
The current health care reforms drafts, at least in the Senate, would create regional risk pools that drive out the incentive to "cream." In short, if Insurance Company A insured only the lowest-risk half of a given pool, it would have to pay a subsidy that goes to the company (or public plan) insuring the highest-risk members of the pool. In other words, we would drive out the incentive to cream, while also making it illegal to deny coverage on the basis of a pre-existing condition. CMS would manage that risk-balancing process, and has apparently become quite good at it. The Netherlands does something similar, so successfully that insurers actually seek out diabetics to insure.Now over the weekend, President Obama's senior adviser David Axelrod said something rather alarming to a lot of people who believe a public option is a good and necessary step in providing health care to all Americans:
White House senior adviser David Axelrod says President Barack Obama would like to have a public option – or government-run insurance plan – as part of a health reform package, but will not insist on it.Personally, I see this as typical Obama, focused on a goal rather than an ideological means, (and Axelrod noted in the same interview that "the president believes strongly in a public choice, and he has made that very, very clear."), but I also understand why folks are alarmed. Obama is essentially asking for a whole lot more faith on this than many of us are willing to believe a situation with the insurance companies motivated to keep things more or less the same as strongly as they are warrants. We saw what they did to Hillary. Then again, perhaps this compromise will pay off. Perhaps the insurance companies will see their way toward real reform, rather than digging in their heels for a battle over the public option.
I don't believe that's the case, though, as Marshall also notes:
[T]the opposition to a so-called 'public option' comes almost entirely from insurance companies who have developed monopolies or near monopolies in particular geographic areas. And they don't want competition.That's some freakishly strong motivation to keep things as they are.
Note, I'm not saying more competition. I'm saying any competition at all. As Zack Roth explains in this new piece 94% of the health care insurance market is now under monopoly or near-monopoly conditions -- the official term of art is 'highly concentrated'. In other words, there's no mystery why insurance costs keep going up even as the suck quotient rises precipitously. Because in most areas there's little or no actual competition.
What I do believe is that the public option will succeed or fail under its own effectiveness, but as long as it's merely another option for Americans and provides true competition for the insurance monolopy, then it's worth a try. Something has got to bring prices down and help make insurance less of an albatross around so many people's necks.