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Debate: Public health insurance option

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Should the US create a public insurance option and hybrid public-private health care system?

Background and context

The United States has been struggling to reform its health care system for decades. A "public insurance option" stands out as one of the most significant and hotly debated ideas for reform. The proposal would create a hybrid public-private insurance system, in which public health insurance is made available along-side and as an alternative to existing private insurance.
One of the main intentions of the "public option" is to offer affordable health insurance to over 47 million uninsured Americans, or "individuals without access to group coverage through their workplace or current public programs."
In addition, as president Obama argued in a letter to Sen. Edward Kennedy (D-Mass.) and Sen. Max Baucus (D-Mont.), public insurance would offer "the choice of a public health insurance option operating alongside private plans. This will give [citizens] a better range of choices, make the health care market more competitive, and keep insurance companies honest." The public insurance option is modeled after Medicare and would be available to Americans younger than 65. The proposal has aroused almost unprecedented public debate, receiving passionate support from most Democrats and heated opposed by the majority of Republicans The debate has revolved around multiple questions: Does a public health insurance option offer an important alternative choice to citizens and patients? Would it be helpful in competing against private insurers, subsequently causing them to provide more competitive and honest pricing and services? Or, would a publicly-funded option unfairly and non-competitively drive private insurance companies out of business? Can a public option be more effective than private ones? Can it cut-costs and supply superior health care? Or, would it result in exorbitantly expensive "socialized medicine" and ineffective government bureaucracy? Would this be any worse (or possibly even better) than the private insurance bureaucracy that already exists? Does the profit-interest have a proper place in health insurance? Should it be checked by a "public option"? Have similar "public options" around the world - hybrids of private and public systems - proven successful? Overall, is a public health insurance option in the United States a good idea?

For more background, see Wikipedia's article on health care reform in the US and US health care

Contents

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Choice: Is it important to give citizens the choice of a public insurance option?

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Pro

Edward M. Kennedy. "Health bill would fix what's broken". Boston Globe. May 28, 2009: "we will give Americans better choices for health insurance. An important foundation of our legislation is the following principle: If you like the coverage you have now, you keep it. But if you don't have health insurance or don't like the insurance you have, our bill will give you new, more affordable options."


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Con

  • Private insurers offer sufficient choices Karl Rove. "How to Stop Socialized Health Care" Wall Street Journal. June 11, 2009: "Advocates say a government-run insurance program is needed to provide competition for private health insurance. But 1,300 companies sell health insurance plans. That's competition [and choice] enough. The results of robust private competition to provide the Medicare drug benefit underscore this. When it was approved, the Congressional Budget Office estimated it would cost $74 billion a year by 2008. Nearly 100 providers deliver the drug benefit, competing on better benefits, more choices, and lower prices. So the actual cost was $44 billion in 2008 -- nearly 41% less than predicted. No government plan was needed to guarantee competition's benefits."
"The end of private health insurance". Wall Street Journal (editorial). April 13, 2009: "This public option will supposedly 'compete' with private alternatives. As President Obama likes to put it, those who are happy with the insurance they have now can keep it -- and if they happen to prefer the government offering, well, gee whiz, that's the free market at work. The reality is far different. Not only will the new program become the default coverage for the uninsured, but Democrats intend to game the system to precipitate -- or if need be, coerce -- an exodus to government from private insurance. Soon enough, that will be the only 'option' left."
  • Public health insurance creates two-tiered system (choice) Ronald Bailey. "The beginning of the end of private health insurance". Reason. June 9, 2009: "The best result of creating a parallel public insurance scheme is that the United States would end up with an explicit two-tier medical system in which privately insured Americans have better access to better medical care. Such two-tier health care systems already exist in countries with national health care schemes such as the United Kingdom and Germany. In the United Kingdom, more and more Britons are opting for private health insurance instead of remaining with that country's National Health Service. Privately insured Americans would get higher quality health care, but because the market for medical innovation would be smaller, everybody will get worse care than they would otherwise have received had most health care not been nationalized."
  • Government-run health insurance restricts doctor/patient choices. Republicans argued in a June 2009 letter to President Obama: "[Public insurance] would be a federal government takeover of our healthcare system, taking decisions out of the hands of doctors and patients and placing them in the hands of a Washington bureaucracy."[2]
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Competition: Does a public option increase competition?

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Pro

  • Contradictory to argue public option bad, insurers can't compete Critics of a public insurance option often argue simultaneously that a government-run insurance option is far worse, and less efficient than private insurance. Yet, they then argue that a private insurance company cannot compete with a government program. This is contradictory. If private insurers believe their product is superior, they should not be worried about a public option.
  • Progress with public plan is more important than "competition" Insuring that over 40 million Americans have health insurance is much more important than the ideological notion of "fair competition". This is not to concede that a public plan is unfair, but rather to say that the whole debate over a "level playing field" misses the point that this is primarily an issue about insuring millions of uninsured individuals, by whatever means possible. These individuals need health insurance more than the health care industry needs a level playing field to continue its high profits.
  • Government will not favor public insurer over private insurers John Holahan and Linda Blumberg. "Is the Public Plan Option a Necessary Part of Health Reform?" Urban Institute: "[one argument against the public option] is that the public plan will always be favored—that there is no way that Congress would let the public plan fail and would find ways to tilt the playing field in its favor, providing it with advantages not afforded private plans. However, experience with the Medicare program does not support this concern. Indications from the Medicare Advantage experience suggest that, if anything, private plans would most likely be favored over a public plan. For example, Medicare Advantage plans are paid percent more than Medicare fee-for-service in 2009 for the average beneficiary, clear evidence that traditional Medicare has not always been favored (MedPAC 2009)."
  • Public insurance would not kill the private insurance industry Probably the best evidence of this is found abroad in places such as France, where both public and private health insurance options exist in a hybrid system. This system is rated the best health care in the world, and the private health insurance industry there is doing very well, and filling an important premium market beyond basic government insurance.
  • Public and private insurers can learn from each other Jacob Hacker. "The case for public plan". The Institute for America's Future: "public and private plans can learn from each other as they exploit their strengths and remedy their weaknesses. Expanded coverage of prescription drugs by Medicare HMOs, for example, demonstrated the feasibility of drug coverage for the elderly and helped to increase political pressure for drug coverage for all people with Medicare. The development of performance measures for Medicare private plans provided a template for projects testing comparable measures under the public Medicare plan. Similarly, innovations in coordinating care for elders with chronic illness in private plans have provided a useful foundation for care-coordination demonstrations in the public Medicare plan."
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Con

  • Insurance industry has sufficient competition w/o public option Karl Rove. "How to Stop Socialized Health Care" Wall Street Journal. June 11, 2009: "Advocates say a government-run insurance program is needed to provide competition for private health insurance. But 1,300 companies sell health insurance plans. That's competition enough. The results of robust private competition to provide the Medicare drug benefit underscore this. When it was approved, the Congressional Budget Office estimated it would cost $74 billion a year by 2008. Nearly 100 providers deliver the drug benefit, competing on better benefits, more choices, and lower prices. So the actual cost was $44 billion in 2008 -- nearly 41% less than predicted. No government plan was needed to guarantee competition's benefits."
  • Competition in private insurance can be improved without public plan. While it is true that the private insurance industry does have some anti-competitive monopolies, conglomerations, and State boundary issues, this does not mean that a more competitive environment cannot be created. This can and should be done, but it is unnecessary to inject into the equation a public insurer.
  • Public insurance would destroy private insurance industry Karl Rove. "How to Stop Socialized Health Care" Wall Street Journal. June 11, 2009: "government-run health insurance would crater the private insurance market, forcing most Americans onto the government plan. The Lewin Group estimates 70% of people with private insurance -- 120 million Americans -- will quickly lose what they now get from private companies and be forced onto the government-run rolls as businesses decide it is more cost-effective for them to drop coverage. They'd be happy to shift some of the expense -- and all of the administration headaches -- to Washington. And once the private insurance market has been dismantled it will be gone."
  • Public option monopoly squeezes health care suppliers, doctors Gregory Mankiw. "The pitfalls of the public option". New York Times. June 27, 2009: "Which raises the question: Would the existence of a dominant government provider of health insurance be good or bad? [...] A dominant government insurer [...] could potentially keep costs down by squeezing the suppliers of health care. This cost control works not by fostering honest competition but by thwarting it. [...] If the government has a dominant role in buying the services of doctors and other health care providers, it can force prices down. Once the government is virtually the only game in town, health care providers will have little choice but to take whatever they can get. It is no wonder that the American Medical Association opposes the public option."


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Universal care: Is the public option the best way to universal health care?

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Pro

  • Public insurance protects uninsured from economic calamity 2009 Statement by the American Nurses Association: "A public health insurance plan would expand choices and help protect against potential economic calamity for individuals or families who are not satisfied with their current health coverage, have difficulty paying for their health care, or cannot find affordable coverage."[4]


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Con

  • Employers may dump their employees into public insurance Stuart Butler. "The Case Against: The public plan will unfairly crowd out private coverage". Heritage Foundation. July 28, 2009: "[With public insurance] there would actually be big changes for many already insured people. Faced with a low-cost public option, many employers would simply close down their existing plan and push their employees into the public plan. Remember that Wal-Mart encouraged eligible employees to sign up for Medicaid, until states and unions thwarted them. All serious analysts agree that many Americans would find themselves dumped into the public plan." Because a public plan would have limited insurance, the public plan may not be able to cover all these people dumped by their employers. In the end, therefore, a public plan may leave more people without insurance, employer-provided or otherwise. Or, it may just entirely negate itself by simply transferring insured individuals from private plans to a public one, leaving little room for the remaining uninsured.
  • Universal health care in the US is not a "necessity". Health care is not a right. It is, therefore, not "necessary" for the government to provide universal health care. A public plan, subsequently, is not a "necessity", in-so-far as it may offer universal coverage.


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Socialized medicine: Can a public option avoid becoming "socialized medicine"?

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Pro

  • Public insurance bureaucracies are better than private ones Paul Waldman. "The Public Option and the Hope of Health Care Reform". American Prospect. December 23, 2008: "There is no doubt that the insurance companies and their Republican allies in Congress will fight the inclusion of a public option with every bit of power they can muster. They'll call it 'socialized medicine' -- but by now we should all have realized that Republicans will call any health care reform Democrats propose 'socialized medicine' (that's what they said about Clinton's 1993 health plan, whose chief cost containment measure was enhancing the role of HMOs). They'll scream about 'government bureaucrats getting between you and your doctor.' But anyone who has tried to get reimbursement for a medical service from an insurance company that didn't want to provide it knows that government bureaucrats are pussycats compared to insurance company bureaucrats."
  • Private insurers ration as-much or more than public insurance. Critics frequently argue that government-run health care involves the government "rationing" health care. Yet, private insurance companies "ration" to an even greater extent by denying claims and developing methods for maximize profits, and minimize outlays to those they are insuring. "Rationing" in this sense is the core businesses model of insurance companies. How can a government-run insurance option be any worse than this, particularly when it does not have the for-profit motive, so will offer as much health care to as many people as possible?
  • US already has public-private health insurance hybrids Tom Daschle. "A public plan will reduce costs and improve access". Newsweek. May 2, 2009: "A growing number of Americans already get their health care from a public plan, including Medicare, Medicaid and the Children's Health Insurance Plan (the Department of Veterans Affairs, of course, also provides benefits). There are public-private hybrids as well, like state employee health plans where the government assumes the risk and insurance companies are responsible for the management. The use of a public plan as it is currently proposed is simply an extension of what we have already done in public policy during the last 50 years. We just have to circle the bases." This should dampen concerns that a public plan is somehow "foreign", and a dramatic attempt to socialize medicine.
  • Efforts to create a public-private insurance hybrid are in good faith. There is no reason to believe that the intentions of those that are advocating for a public option are bent on destroying the insurance industry and creating a single-payer system. It is true that there are many advocates of a pure single-payer system, but there are just as many advocates of a hybrid system. Those that propose such a hybrid - through a public option - should be taken on their word, instead of called liars with a hidden agenda.
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Con

"The End of Private Health Insurance". Wall Street Journal (editorial). April 13, 2009: "[The public option] will only hasten the flight to government. Meanwhile, employers small and large will have every incentive to dump their plans and transfer their workers to the public rolls. The result will inevitably be a cascade of failures or withdrawals from the market by commercial insurers, with the public option as the only option for the diaspora. [...] Congress will finish the job with regulatory changes. Under the aegis of a level playing field, all private plans will be forced to offer benefit packages similar to those in the public option. They will also be required to accept all comers, regardless of pre-existing conditions, and also be forced to offer similar rates to all enrollees, ending the ability to manage risk through underwriting. Any private plan will essentially become a public utility where government decides what products it must offer and how much it can charge."
  • Public insurance leads to socialized medicine, rationing, long-lines Dr. Donald J. Palmisano, a leading surgeon and former president of the AMA who heads the physicians group Coalition to Protect Patients' Rights: "The government takeover of the practice of medicine [starting with a public insurance program] will destroy the private health insurance companies, and will result in rationing, long lines, and loss of access to physicians in the patient hour of need."[5]
"The End of Private Health Insurance". Wall Street Journal (editorial). April 13, 2009: "Once government takes over the majority of U.S. health-care liabilities [with a public option], it can either provide every service at huge and growing cost, or it can ration services. People who need an MRI or hip replacement or whatever will face waiting lines. Medical innovation will be at the mercy of the price controls hashed out in Washington."
  • Public option forces taxpayers to pay for other people's insurance. Those that decide to keep their private insurance will gain nothing from the public insurance option, and will actually have to subsidize the public insurance option by paying higher taxes. This violate the liberty of the majority of taxpayers in order to insure individuals that are often simply too irresponsible to seek and obtain their own private insurance. Such breaches of the individual liberties of taxpayers are unjust.


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Quality: Would a public insurance option improve quality of care?

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Pro

  • Public health insurance is more reliable and less stressful 2009 Statement by the American Nurses Association: "What is lacking in our current health care system, driven by for-profit, private insurance companies, is the reliability and predictability of accessible, affordable care. Many people have encountered the unpleasant reality that they can be denied care when they need it most, or lose coverage when they can least afford it.Private insurers can discriminate based on preexisting conditions, health status, gender, age, claims history, or other factors. In addition, in this unstable employment market, the loss of a job often leads to loss of health coverage, as insurance becomes less affordable."[6]


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Con

  • Public insurance less agile/innovative than private insurance Michael J. Critelli, who served as the chief executive at Pitney Bowes for 11 years, where he was an innovator in employer-based health care: "I cannot imagine that any public health plan operated under the same rules as a private insurance plan could be competitive. The public plan would be subject to all sorts of political interventions and would be required to delay making changes in health plans until it had solicited extensive public comments. It would not be allowed to operate as flexibly with respect to labor work rules or to invest in much technology innovation as a private insurance carrier."[7]
  • Public health insurance creates two-tiers of quality Ronald Bailey. "The beginning of the end of private health insurance". Reason. June 9, 2009: "The best result of creating a parallel public insurance scheme is that the United States would end up with an explicit two-tier medical system in which privately insured Americans have better access to better medical care. Such two-tier health care systems already exist in countries with national health care schemes such as the United Kingdom and Germany. In the United Kingdom, more and more Britons are opting for private health insurance instead of remaining with that country's National Health Service. Privately insured Americans would get higher quality health care, but because the market for medical innovation would be smaller, everybody will get worse care than they would otherwise have received had most health care not been nationalized."
  • Public insurance would stifle medical innovation and advancement John Lechleiter. "Health-Care Reform and the 'Innovation Test'" Wall Street Journal. May 14, 2009: "I've spent three decades working in or near biopharmaceutical research and development. During that time, I've witnessed breakthroughs as diverse as biosynthetic human insulin, bone-forming agents for treating osteoporosis, new cancer therapies, and a first-ever treatment for severe sepsis go from glimmers of intuition to everyday medical tools. [...] Inventions such as these -- and my list includes only the partial output of the company I work for -- have transformed the most basic expectations of human life in the last century. Today, the average life expectancy at birth in the U.S. is 78; when my mother was born in 1928 it was 57. (She's still in great health, by the way.) [...] Even in the last two decades of the 20th century, new medicines accounted for 40% of the increase in life expectancy in more than 50 countries, according to a recent study by Columbia University economist Frank Lichtenberg. In other words, for every year that life expectancy has increased, five months can be attributed to the availability of new medicines. [...] U.S.-based private industry is the heart and soul of this innovation drama, investing $58 billion in research and development for new medicines in 2007 alone. [...] it is vital to all of us that we insist that reform proposals pass the 'innovation test.' Providing insurance to millions of Americans through a government-run plan would fail the test. Similar efforts around the world have led to rationing of health care and created hurdles between patients and the most advanced treatments. On the other hand, innovation would remain reasonably secure if universal access were achieved through tax credits and government subsidies that allow patients to choose from a variety of private health-financing options."


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Costs: Is a public option economical, or worth the costs?

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Pro

  • Public insurance delivers same quality insurance at a lower price Jacob Hacker. "The case for public plan". The Institute for America's Future: "COST-CONTROL ADVANTAGES OF PUBLIC INSURANCE. It is often assumed that private health plans are much more efficient than public health insurance. Yet a range of studies demonstrate that public insurance is able to provide a given level of benefits for less than they would cost through private insurance. Lower administrative costs and the ability to bargain for lower service and drug prices chiefly explain this advantage, as does the obvious lack of a profit margin in public programs. These features of public insurance not only allow it to offer the same coverage for less than private plans. They also, the evidence suggests, allow it to better restrain the increase in costs over time while preserving inclusive coverage."
  • Public insurance would not waste money on advertising Signe Wilkinson. "Unhealthy arguments against public option" Philadelphia Daily News. July 14, 2009: "JUST IMAGINE: "Fireworks Night" at the Phillies' game brought to you by . . . Medicare. Would you wonder why the federal government was spending beacoup bucks on pyrotechnics and a huge sign saying "Choose . . . the Public Option"? [...] Yet the fireworks shows at Citizens Bank Park last Thursday and Friday were brought to the sellout crowds by Independence Blue Cross. When the lights were dimmed to better view the display, one huge sign stayed lit: 'Choose Blue.' [...] Blue Cross and other major health-care insurers are among the most vocal opponents of a robust "public option" in the health-care reform legislation being negotiated in Congress; they say it won't work because government is congenitally wasteful. But it's a cinch that government-run health insurance wouldn't spend money on fireworks or advertising."
  • Greater prevention and health through public insurance saves money. A public insurance option will guarantee universal coverage, and will ensure that people receive good preventive care, instead of waiting to see if they can ride out their health issues on their own. This saves money in long-term health care costs. And, by ensuring that individuals do not fall ill or victim to being uninsured, a public insurance option will ensure that individuals stay economically productive.
  • Public insurance protects uninsured from calamity 2009 Statement by the American Nurses Association: "A public health insurance plan would expand choices and help protect against potential economic calamity for individuals or families who are not satisfied with their current health coverage, have difficulty paying for their health care, or cannot find affordable coverage."[8] Indeed, health care is a leading cause of bankruptcy, which severely damages an individuals ability to engage productively in the economy. A public plan will nearly eliminate bankruptcies resulting from being uninsured, subsequently freeing individuals to productively add value in the economy.


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Con

  • Expensive public insurance option would worsen national debt Karl Rove. "How to Stop Socialized Health Care" Wall Street Journal. June 11, 2009: "the public option is far too expensive. The cost of Medicare -- the purest form of a government-run 'public choice' for seniors -- will start exceeding its payroll-tax 'trust fund' in 2017. The Obama administration estimates its health reforms will cost as much as $1.5 trillion over the next 10 years. It is no coincidence the Obama budget nearly triples the national debt over that same period. [...] Medicare and Medicaid cost much more than estimated when they were adopted. One reason is there's no competition for these government-run insurance programs. In the same way, Americans can expect a public option to cost far more than the Obama administration's rosy estimates."
Mike Lillis. "Lieberman comes out against public plan option". Washington Post. June 15, 2009: "I’m fearful that at a time when we’re spending much too much money here in Washington, going much too deeply in debt that a public option on health care, no matter how you structure it, will end up costing the taxpayers money."
"Voters Find Serious Vulnerabilities in Democratic Health Care Proposals." Resurgent Republic. June 22, 2009: "Concern about runaway federal spending and mounting federal debt is the Achilles heel of the Obama health care plan. Its opponents should place these fiscal concerns at the center of their argument. [...] concern about rising health care costs outstrips every other economic concern today. Health care costs rank first on the list of greatest financial concerns (19%), ahead of paying for retirement (16%) or the mortgage (13%), losing a job (12%), education costs (11%) or taxes (8%)."
  • Public insurance costs will grow as private insurance is pushed out The American Medical Association argued in June of 2009 letter to the Senate Finance Committee: "If private insurers are pushed out of the market, the group said, 'the corresponding surge in public plan participation would likely lead to an explosion of costs that would need to be absorbed by taxpayers.'"[9]
  • Public insurance will be used excessively at greater cost Walton J. Francis. "Why a new public plan will not improve American health care". Heritage Foundation. May 5, 2009: "Excess Use. Then there is the matter of managing patient care to improve outcomes and reduce costs. Medicare spends zero on this function.[31] Private plans spend around 5 percent in administrative costs to manage care (second surgical opinions, pre-certification for hospital stays, and the review of preferred provider outcomes, etc.) and often save around 10 percent in reduced use of health care ser vices. Medicare's administrative costs look better arithmetically because the denominator is higher and the numerator is lower, but the advantage is again entirely illusory—$100 in frugal care costs the private plan $16 (the previous $11 plus $5), while Medicare is spending $120 and wasting $20—$10 on fraud and $10 on overuse in addition to the $5 it spends on bill paying. Again, the worse the actual performance, the better Medicare's administrative costs appear as a percentage of total spending."
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Medicaid/Medicare: Do these examples support or undermine a public option?

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Pro

  • Medicare out-performs private insurance, is a model for public insurance Jacob Hacker. "The case for public plan". The Institute for America's Future: "The case made in this brief is that this menu of health plans must include a good public plan modeled after Medicare if the broad goals of reform—universal insurance and improved value—are to be achieved. [...] First, public insurance has a better track record than private insurance when it comes to reining in costs while preserving access. By way of illustration, between 1997 and 2006, health spending per enrollee (for comparable benefits) grew at 4.6 percent a year under Medicare, compared with 7.3 percent a year under private health insurance. At the same time, Medicare has maintained high levels of provider participation and patient access to care. [...] Medicare has proven superior at cost control not just to health plans in the private sector, but also to private plans that contract with the federal government, such as those offered through the Federal Employees Health Benefits Program (FEHBP)—suggesting that public insurance can outperform private plans even in the context of insurance reforms."


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Con

Steven Pearlstein, The Washington Post's Pulitzer-Prize winning economics columnist, explains that with a level playing field, the government option would have "to spend its own money to collect premiums, market itself to customers, maintain a reserve, and manage care in a way that lowers costs and raises quality — none of which Medicare now does."[11]
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Vs. mandates: Is public insurance superior to mandating buying private insurance?

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Pro

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Con

  • Universal care better achieved with mandates than public option Stuart Butler. "The Case Against: The public plan will unfairly crowd out private coverage". Heritage Foundation. July 28, 2009: "One argument is that a government-sponsored plan is needed so that Americans with modest income and chronic medical problems -- the kind of people who are literally uninsurable -- can be assured of getting coverage. [...] But this overlooks everything else that has already been agreed. There's bipartisan support for subsidies and health exchanges to assure portable, affordable coverage. Even the health insurance industry would accept revamped regulation to limit premium variation so that sicker people can get coverage. And we've made great progress in recent years with reinsurance and risk adjustment mechanisms to handle high-risk people. [...] A public plan does nothing to advance on this. It is anathema to many of the very people who are in agreement and just throws a monkey wrench into the discussion."


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Regulation: Is better regulation of insurance companies insufficient?

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Pro

  • Status quo of insurance company control is unacceptable Barack Obama. "Why We Need Health Care Reform". New York Times. August 15, 2009: "In the coming weeks, the cynics and the naysayers will continue to exploit fear and concerns for political gain. But for all the scare tactics out there, what’s truly scary — truly risky — is the prospect of doing nothing. If we maintain the status quo [of health care dominated by health insurance companies under government regulations], we will continue to see 14,000 Americans lose their health insurance every day. Premiums will continue to skyrocket. Our deficit will continue to grow. And insurance companies will continue to profit by discriminating against sick people."


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Con

  • Healthcare reform/regulation can succeed without public option Stuart Butler. "The Case Against: The public plan will unfairly crowd out private coverage". Heritage Foundation. July 28, 2009: "One argument is that a government-sponsored plan is needed so that Americans with modest income and chronic medical problems -- the kind of people who are literally uninsurable -- can be assured of getting coverage. [...] But this overlooks everything else that has already been agreed. There's bipartisan support for subsidies and health exchanges to assure portable, affordable coverage. Even the health insurance industry would accept revamped regulation to limit premium variation so that sicker people can get coverage. And we've made great progress in recent years with reinsurance and risk adjustment mechanisms to handle high-risk people. [...] A public plan does nothing to advance on this. It is anathema to many of the very people who are in agreement and just throws a monkey wrench into the discussion."


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Getting reform: Is the public option a threat to reform of any kind?

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Pro

  • Public insurance option is a reasonable compromise. The public insurance option is a compromise between the very prominent extremes of those that want the continuation of the status quo - with solely private insurance companies in charge of health care - and those that advocate for a single-payer system, in which insurance companies simply cease to exist. It is therefore, unreasonable to argue that such a half-way compromise (that concedes the possibility of destroying the insurance industry altogether with a single-payer system) goes to far. It is a reasonable compromise that should not be seen as a deal-breaker by opponents of government programs.


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Con

  • There are not enough votes to pass a public insurance plan. Independent US senator Joseph Lieberman from Connecticut: "the votes are not there for a public health plan, government-run option. And this can stand in the way of a historic achievement for President Obama and Congress and the American people, which is really to establish a universal access to quality, affordable health care plan in America."[13]
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Businesses: Would a public option benefit businesses?

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Pro

  • Public insurance makes workers healthier and more productive. A public insurance option will guarantee universal coverage, and will ensure that people with medical conditions receive the preventive care they need, which saves money in long-term health care costs. And, by ensuring that individuals do not fall ill or victim to being uninsured, a public insurance option will ensure that individuals stay economically productive.


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Con


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Doctors: Does a public insurance option favor doctors/hospitals?

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Pro

  • Public insurance will give doctors/hospitals millions of new patients. It is surprising that the American Medical Association would complain about over forty million Americans suddenly having insurance so that they can pay doctors and hospitals for health care services. This is certainly a good thing for the health care industry overall (doctors in particular), despite possibly being a less than advantageous opportunity for the private health insurance industry. So what's the problem?
  • Public insurance frees doctors from paperwork with private insurers. Washington State Congressman Jim McDermott said in July 22nd comment to Fox News: "If things are so good [for doctors], why are doctors buried under an ever-increasing mountain of paperwork from insurance companies?"[14]
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Con

  • Hospitals may be overwhelmed by new public-insurance patients. American Medical Association said in a June 2009 letter to the Senate Finance Committee that it "cannot support any plan design that mandates physician participation... many physicians and providers may not have the capability to accept the influx of new patients that could result from such a mandate.
  • Public insurance wrongly mandates physician participation. The American Medical Association wrote in a June 2009 letter to the Senate Finance Committee that the association, "cannot support any plan design that mandates physician participation... Federal programs traditionally have never required physician or other provider participation, but rather such participation has been on a voluntary basis [...] we absolutely oppose government control of health care decisions or mandatory physician participation in any insurance plan.”[15]
  • Public insurance will discourage people from becoming doctors. Public insurance, and the specter of increasingly socialized medicine, will discourage prospective doctors from entering the industry, as they will fear that their hard work will not be fairly rewarded.
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Cooperatives: Are cooperatives an inadequate alternative to public insurance option?

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Pro

Jacob Hacker, a Yale University political scientist who helped develop the public option concept, calls co-ops a "fig leaf to cover up a lack of commitment to a public plan".[16]


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Con

  • Co-ops are not government-run like public insurance "Cooperatives Being Pushed as an Alternative to a Government Plan". Washington Post. August 18, 2009: "As prospects fade for a public, or government-run, option as part of health-care reform, key senators are considering another model to create competition for private insurers: member-owned, nonprofit health cooperatives. [...] Sen. Kent Conrad (D-N.D.), the chief advocate for including cooperatives in reform legislation, has cited examples as disparate as the Land O'Lakes dairy concern, rural electricity cooperatives and Ace Hardware. [...] But so far, cooperatives have been defined in the health-care debate primarily in terms of what they are not: They would not be run by the government. [...] That may make the cooperatives more politically palatable to conservatives, as well as to some Democrats such as Conrad, who fear that the public option may be a bridge too far."
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Public opinion: Where does the public stand on this option?

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Pro

  • Divisions on public vs. private healthcare suggests a hybrid Jacob Hacker. "The case for public plan". The Institute for America's Future: "Perhaps that is why Americans have long been strongly supportive of public-private hybrids in health care, believing that neither the government nor private insurance should be the sole source of coverage in a reformed system. In polls, a Medicare-like program covering all Americans beats the current system hands down. Yet Americans are even more receptive toward a mandate on employers to provide coverage.78 Historically, Americans have been deeply divided about their preferred approach to expanding health insurance. Although repeated surveys find a majority endorsing “national health insurance” for most of the second half of the twentieth century, when asked explicitly, Americans split evenly between those who favor administration of insurance benefits by government and those who prefer subsidies for private insurers.79 Thus, Americans seem to desire a combination of both private employment-based coverage and expanded public programs."
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Con

  • Following majority support for public option is tyranny of majority. Appeal to the majority is nothing more than tyranny of the majority and means absolutely nothing to whether a public insurance option is worth it or will even help. Just in case you don't believe this, ask yourself this... if 51% of the public thought slavery was good, would you use that as an argument for a change in equal rights' laws?


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