UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

July 27, 2009

BAIT AND SWITCH ON THE 'PUBLIC OPTION'

Kip Sullivan, Physicians for a National Health Plan - The people who brought us the "public option" began their campaign promising one thing but now promote something entirely different. To make matters worse, they have not told the public they have backpedalled. The campaign for the "public option" resembles the classic bait-and-switch scam: tell your customers you've got one thing for sale when in fact you're selling something very different.

When the "public option" campaign began, its leaders promoted a huge "Medicare-like" program that would enroll about 130 million people. Such a program would dwarf even Medicare, which, with its 45 million enrollees, is the nation's largest health insurer, public or private. But today "public option" advocates sing the praises of tiny "public options" contained in congressional legislation sponsored by leading Democrats that bear no resemblance to the original model.

According to the Congressional Budget Office, the "public options" described in the Democrats' legislation might enroll 10 million people and will have virtually no effect on health care costs, which means the "public options" cannot, by themselves, have any effect on the number of uninsured. But the leaders of the "public option" movement haven't told the public they have abandoned their original vision. It's high time they did.

"Public option" refers to a proposal, as Timothy Noah put it, "dreamed up" by Jacob Hacker when Hacker was still a graduate student working on a degree in political science. In two papers, one published in 2001 and the second in 2007, Hacker, now a professor of political science at Berkeley, proposed that Congress create an enormous "Medicare-like" program that would sell health insurance to the non-elderly in competition with the 1,000 to 1,500 health insurance companies that sell insurance today. . .

Hacker predicted that his proposed public program would so closely resemble Medicare that it would be able to set its premiums far below those of other insurance companies and enroll at least half the non-elderly population. These predictions were confirmed by the Lewin Group, a very mainstream consulting firm. In its report on Hacker's 2001 paper, Lewin concluded Hacker's "Medicare Plus" program would enroll 113 million people (46 percent of the non-elderly) and cut the number of uninsured to 5 million. In its report on Hacker's 2007 paper, Lewin concluded Hacker's "Health Care for America Plan" would enroll 129 million people (50 percent of the nonelderly population) and cut the uninsured to 2 million. . .

Here is what the CBO had to say about the HELP committee bill:

The new draft also includes provisions regarding a "public plan," but those provisions did not have a substantial effect on the cost or enrollment projections, largely because the public plan would pay providers of health care at rates comparable to privately negotiated rates – and thus was not projected to have premiums lower than those charged by private insurance plans. (page 3)

Obviously the "public option" in the Senate HELP committee bill (zero enrollees; 34 million people left uninsured) and the "public option" in the House bill (10 million enrollees (maybe!); 17 million people left uninsured) are a far cry from the "public option" originally proposed by Professor Hacker (129 million enrollees; 2 million people left uninsured).

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