Tuesday, November 24, 2009

There’s a Reason Why Health Reform Must Include a Viable Public Option from Firedoglake

 by Scarecrow http://seminal.firedoglake.com/diary/16068

With so much attention focused on four conservative, obstructionist Democrats, the Democratic leadership seems driven to find some way to placate them. So, it's easy to forget that there are compelling reasons why health reform should not get watered down or sidetracked to satisfy the egos and fears of Joe Lieberman, Ben Nelson, Mary Landrieu or Blanche Lincoln.

It's not just that it would be insulting to the Senate and House majorities and to Democrats generally to undermine essential reforms just to mollify the electoral fears, misapprehensions, or unprincipled opportunism of this less than stellar group. Nor is it that none of these has made a coherent, truthful argument against the public option or for shielding private insurers from a viable competitor. This isn't about some abstract market principle.

The nation's health care system is in crisis, and it's getting worse, inexorably and without mercy for those whose lives are being literally and financially destroyed. On Saturday in Arkansas, there were a thousand people lined up for a free clinic, a thousand reasons among millions like them why passing health insurace and care reform is a moral imperative. But the breakdown isn't simply in the growing number of uninsured, under-insured and fraudulently insured and abused.

The folks who monitor the nation's health insurance systems have been telling us for years that the employer-based system is systematically eroding, and the only thing saving us is the expansion of public health progrrams. In the last decade alone, the employer-based system has fallen from covering nearly 65 percent to covering less than 60 percent. As health care costs and insurance premiums escalate, employers will continue to limit and drop coverage, and the pace of that erosion will quicken. Despite all the rhetoric about "preserving what works," the employer-based insurance system is failing and must be replaced.

We could have chosen a single-payer insurance system to replace it; we know it works, because we use it for those over 65. But it was dismissed out of hand partly for indefensible ideological reasons but mostly because few believed displacing an entire industry with enormous political power was achievable in a Congress as corrupt as ours. So the pragmatic excuse became that such a radical transition was simply too disruptive.

But if that's the excuse, it follows that meaningful reforms needed to provide a more careful, less-disruptive, but steady transition to a new sustainable foundation. Having abandoned a single-payer government insurance system, Democrats bought into a combination of private insurance reforms, enhanced regulation, and a government-sponsored public option to reinforce and, if needed, expand enough to potentially replace the rest.

If it were sufficiently viable when the exchange(s) opened, the public option would hold the rest of the reforms together and reinforce the regulatory goals. But if it were too crippled to even get started — the debate about Medicare rates and providers was a proxy for that fight — or too weak to become viable, all the other reforms would be at risk, gradually undermined and likely fail.

A viable public option would provide a meaningful choice to shoppers in the new exchange(s); it would put downward pressure on private insurer premiums; it could provide a payment platform for implementing cost-control and payment-incentive measures among select providers.

Equally important, but often overlooked, a viable public option would provide the necessary safety net for the millions of Americans who, as CBO and knowledgable experts predicted, would be discriminated against by the private insurers seeking to cherry pick the younger, healthier enrollees in the exchange. CBO confirmed that view, implicitly conceding that the insurance reforms would not work as intended, so a safety net would be needed as a check. In short, a viable public option would make all the other transitional elements work better.

Once this new structure became functional, the doors to the exchange could be gradually opened to more and more employers and enrollees, allowing a controlled but systematic migration from the employer-based system to the new regime. It is impossible to predict how this market would sort out; perhaps the public option would dominate, perhaps not; but the system would move towards some equilibrium combination of public and private insurers.

What's important is that without the public option, an equilibrium would likely exclude the more costly patients through systematic discrimination that regulators would find difficult either to detect or prevent — and the reform effort would eventually fail.

It's necessary to restate this theory, because the Senate is in great danger of forgetting what it's about. The four recalcitrant Senators do not understand even the basic concepts, and so far, none of them has been honest or coherent in explaining their opposition to the logical case for a public option. They don't get it, and they don't care, but they should not be coddled because it matters to the rest of us.

The public option is at the heart of insurance reform, the core piece in a transition that must take place. It's not a bargaining chip for rounding up four clueless Senators. It would be unconcionable for the Senate leadership to cut out the heart to accommodate the know-nothings of their party.

Howard Dean is right; Arianna Huffington is right; Jane Hamsher is right. The public option is essential to reform. It must be retained, protected and strengthened. Without it, health insurance reform will be just a very bad, very foolish, and very expensive experiment — and clearly not the platform Democrats should want in 2010.

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