A Public Health Care Option Would Save Consumers Money

And that is why Olympia Snowe wants to keep it out of the Obama administration’s health care reform bill. Chris Bowers quotes from an AP article published in the Baltimore Sun:

The main goal of health care reform is to lower the cost of health insurance. Apropos, Olympia Snowe thinks that the problem with a public health insurance option is that a public option would… wait for it… lower the cost of health insurance:

In an Associated Press interview in Portland, Snowe said it would be unfair to include a government-run health insurance option that would take effect immediately.”If you establish a public option at the forefront that goes head-to-head and competes with the private health insurance market … the public option will have significant price advantages,” she said.

Well, duh. That is the whole point. You can’t lower the price of health insurance unless you start offering lower-priced health insurance. It’s a tautology.

So, naturally, during the fight to lower the price of health insurance, so-called moderate Senators think that the problem with the public option is that it would… lower the price of health insurance. While it may be news to so-called moderate Senators, protecting the crappy products of large corporations is not their job description.

Ezra Klein thinks Sen. Snowe is being a bit less than completely honest:

When Olympia Snowe says that they public option will have “price advantages,” she’s saying that it will be able to negotiate lower prices with health-care providers and thus offer consumers lower premium costs. This will make it hard for private insurers to compete because no one will want to pay more for worse service.

I imagine that Snowe’s concern extends a bit further than that: If private insurers can’t compete, they’ll go out of business. If they go out of business, the government will control the market. If the government controls the market, various bad things will happen.

Klein goes on to point out the “weirdness” of plugging concepts like “fairness” and “advantages” into a debate over public policy:

But markets aren’t fair. And public policy is about producing beneficial outcomes, not setting up some sort of arena battle between various forms of insurance companies. It would be useful to know what Snowe fears would happen in a market dominated by the public plan. How much money does Snowe think they would save (as that, of course, is why they’re voluntarily choosing the public plan and its “price advantages”)? Would this harm innovation? By how much? Would this decrease access? By how much? Why does she think that? Why should consumers prefer her world over Bernie Sanders’s world?

Snowe’s “trigger” idea is a no-go, says D-Day:

But Snowe’s concept, which would undoubtedly set an unrealizable standard to prevent the public option from ever coming into existence – that’s how it works with Medicare Part D, which has a trigger as well – is a complete non-starter. And keep in mind, EJ Dionne informed us yesterday that the main GOP negotiator in the Senate, Chuck Grassley, will not sign onto a deal if only Snowe supports it, which means it would have to move to the RIGHT of Snowe’s concept. And those Republicans are out there today demonizing the public plan as a “Washington takeover”.

Steve Benen gives us the killer logic:

As you’ve probably heard, a public option would improve the system by lowering costs, expanding access, and using competition to improve efficiency. Those who like the idea of a “trigger” argue that if we pass a reform package and private insurers can lower costs, expand access, and improve efficiency on their own, we wouldn’t need a public option. It’s better, they say, to wait for the system to get really awful before utilizing a public option to make things better.

The problem should be obvious: if proponents of such an idea realize that a public option would necessarily improve the overall system — and they must, otherwise there would be no need for the trigger to kick in when things got even worse — then why deliberately delay implementation of the part of the policy that lawmakers already realize would help?

Or, put another way, if Snowe knows a public option is a good idea, there’s no reason to push it off to some arbitrary date in the future, as the system deteriorates in the interim.

That’s much too sensible for Congress:

A significant price advantage is, of course, a good thing if you’re interested in delivering quality affordable coverage to everyone. Cheaper is a good thing. But not to Senator Snowe. As Chris Bowers says “It is pretty amazing that many moderates and industry figures are actually arguing that the problem with including a public option in health care reform legislation is that a public option would lower the cost of health insurance.” Unfortunately, it’s not just a handful of moderates. The more liberal of the two Senate committees working on health reform has come up with a weak public option that would do some good but ultimately lack significant cost advantages over private insurance.

Author: KATHY KATTENBURG

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64 Comments

  1. I agree with Dr J that honesty about economic tradeoffs would be a very good step toward improving efficiency.

    But, honestly, I find the cries of communism and socialism kind of ridiculous.

  2. First of all, sorry for coming back to this so late and so briefly, but the trip went a lot longer than anticipated and was far more busy than usual. We've arrived in the mountains in one piece (I'll try to put up a post on that this morning) but one of the only roads through the area was obliterated in a rock slide this spring and it made things tricky. There were also family members to greet who we rarely see, etc.

    You guys have had a great discussion on this, and it's an important topic, but I'm going to take part of AR's advice and not allow myself to continue to get wound up or bogged down in it too much right now. I'm just in too good of a mood. I still think the public plan defenders here are, in some aspects, being either intentionally misleading or don't grasp the long term effects of what we're discussing, but I can also see how the prospect of free or cheap healthcare for everyone with nobody ever having to pay for it is appealing to the masses. Also, there's that natural, populist, “let's stick it to the man” (in this case the insurance industry) that's really tempting to some.

    But as to AR's point about insults, etc. it was not this thread I was referring to, and George knows exactly which one I'm talking about, where he decided to “enlighten” me about how old white guys are “understandably” uncomfortable with the idea of minorities or women having equal rights. Still, on a bright, sunny morning in the mountains with a boat full of bass gear waiting for me, I find it pretty hard to get annoyed with anyone.

    Anyway, I don't know of this public option will make it out of Congress in one piece. But if it does, and you all get what you're wishing for, let's meet back here in a few years and chew the fat over what happens after you've driven that industry out of business. Be careful what you wish for. You just may get it.

  3. GD –

    all communists of course, according to AR)

    Please, at least be honest and accurate in describing my position, as my words as on this very thread. They are NOT all communists; most are socialists. I allowed for that. But man, you put the communist out there (which SOME on this board sure seem like they are, huh Kathy?), and the result is a feeding frenzy of denial from the left.

    “We don't believe in communism! We just think the government should control the means of production, provide for all the workers, determine the amount everyone should get paid, and make sure everyone is equal (except for those who are more equal than others, of course”

    Certainly no one could think THAT sounds REMOTELY communistic.

    :)

  4. If anyone is still reading this, I will find the post Jazz is referring to and you can decide for yourself if I was begin insulting and abusive toward him or just disagreeing with him.

  5. I just read through the thread, specifically the exchange between Jazz and GS. Looks like a misunderstanding to me, I didn't see anything that looked like insulting or abusive intent. I took George's comment to be a general one, not a personal one.

  6. Statements you find insulting are insulting, just as statements you find funny are funny. Your accusation that most white males are bigots wasn't clearly directed at Jazz but wasn't clearly directed elsewhere either. He took it more personally than he might have or than you probably meant it. But you know how old guys are. :^)

  7. Jazz, I certainly don't want to sour your good mood, but if you think I'm being disingenuous or intentionally misleading, let me point out the facts. The ACTUAL annual cost for Medicare is under $7000 per person. That's 2007, the latest year I can find. It's $300 billion / 43 million covered. That is 100% of the cost actually paid, including all admin and fraud ($40 billion). That is the per person annual cost of covering the highest cost risk pool in the business, the elderly, from 65 to end of life. The cost of health care for ALL Americans was $7,436 per person for 2004, the latest year I could find, and was going up at 6.7% annually, so should be about $9,000 a year in 2007. There is so much scare talk on this subject, but it appears the actual cost of health care for the highest cost segment of the public is costing us less per person than the average of the overall population, including young healthy adults and children.

    Now if you think I'm coloring those facts in any way, please enlighten me. There is no projection or estimation involved at all, just the actual cost divided by the actual served population. Let me note additionally, that the 65+ population is included in the group of “all Americans”, bringing the average down somewhat, so the cost of health care for the younger pool per covered person is bound to be higher.

  8. Dr J–

    I appreciate your willingness to defend me in spite of our often contentious disagreements over the issue of health care.

    Seriously: thanks.

    But I didn't say most white males are bigots and I'm not really sure why anyone would say so. Let me quote myself:

    I completely understand that white men (and even more specifically, straight white men of the middle class or higher) are now expected to share what were once their prerogatives.

    Naturally enough, some–maybe most–of them feel discomfort, anxiety, even resentment over that fact.

    The notion that justice should be blind is a pleasant one, but that pleasant blindness is just metaphorical–I think it means everyone who seeks justice should get a fair shake, without fear or favor.

    I don't think anyone can look at our history and say that justice has ever been blind. That assertion is likely to ring hollow in a lot of ears.

    I also think that a lot of people who lived a hundred years ago–Italians, Poles, the Irish, Jews–would be surprised to see their grandsons considered white men, equal to the Boston Brahmins. I think that's good thing. I think that tendency should continue.

    I doubt many people are still reading this thread, but anyone who still cares is certainly free to go to the link I provided a few comments up and read the whole thing.

    Again, Dr J, thanks. As you may have noticed, Austin Roth defended me way up there on this very thread. Austin Roth and I have been butting heads here for something like five years, so I appreciated his willingness to stand up for me. I should have thanked him sooner.

    Catch you on the next health care thread.

  9. JSpencer–

    Thanks to you also.

  10. George, thank you for the kind words. I appreciate you taking a stand, putting your opinion forth on the issue. You often seem to be holding it back, and instead just picking at other people's opinions. I'm still not sure what your view on health care is, beyond that you don't like mine. This way is much better.

    I'll stand by my reading of what you wrote. “White men resent having to share their prerogatives [with other classes/races]” sounds pretty much the same to me as “white men are bigots.” I'm certainly having trouble seeing much distinction.

  11. Dr J–

    This is a pretty old thread, so I'm not sure anyone else is reading this beside you and me. But again, I'd like to thank you for defending me. Especially if you think I'm just a bigot.

    But I have a complaint. What you have in quotes is not a direct quote by me. And I have to say I've complained about you doing this before.

    I did not say, as you have in quotes, “White men resent having to share their prerogatives”. That's far more extreme than what I actually said.

    Anyone, anyone, anyone can go back up just a few comments and read the actual words I wrote, which were, “white men (and even more specifically, straight white men of the middle class or higher) are now expected to share what were once their prerogatives.”

    In the next sentence, what I then said was, “Naturally enough, some–maybe most–of them feel discomfort, anxiety, even resentment over that fact.”

    I said there's plenty of racial discomfort, anxiety and resentment in America, because that just seems obviously true to me. And it seems obviously true to me that white people feel those things too.

    But there's a great deal of difference between the three–discomfort, anxiety and resentment.

    You don't have to agree. You are free to say my calling the existence of some discomfort, some anxiety, and, yes, some resentment over racial matters in America is proof of my bigotry. But I think that'd be a pretty hard sell. So hard that, instead, you put forth a more extreme argument as if it were in my words–and then used those words of your choosing to bash me as if I'd said them.

    You're free to mock me for nuance. For that matter, you're free to mischaracterize what I said. Just as I'd be free to come back and point out your mischaracterization. These are public threads, so readers are also free to decide which of us had gotten it wrong.

    But you shouldn't be so sloppy on the factual matter of quotation. Anyone can go back up a few comments and read my actual words. I put them there specifically so people could read my own actual words. I put in a link to the entire thread to people could read the whole thing as it actually happened.

    So please don't take your words and put them into my mouth. It's better for your own credibility that way.

    On health care, I favor the public option. Sorry if that's been unclear.

    And I'm sorry if you think I've just been picking on you. To tell the truth, I'm not really sure where you stand. Unlike so many others, you've agreed there's an insurance crisis. But you think the government should butt. Except that you think sometimes the government should be paying for people without insurance.

    I'm sure we'll have plenty of opportunity to disagree about all these things on other threads. But even if you don't see what I'm saying about the racial issue, I hope you'll see what I'm saying about the quotation thing.

  12. Sorry if you feel misrepresented, George, but I'm not sure what else to tell you. Just substitute the antecedents in your sentences, and they read “Some–maybe most–[white men] feel discomfort, anxiety, event resentment over [being expected to share their prerogratives].” I don't think “white men resent having to share their prerogatives” is an unreasonable paraphrase, and I'm still at a loss to understand the distinction you perceive. Sure, discomfort, anxiety and resentment are different, but it was your original that lumped them together.

    None of this, of course, comes anywhere close to calling you a bigot.

  13. Dr J, I'm not sure how to answer.

    Even you admit there are differences among discomfort, anxiety and resentment, so why wouldn't those differences stand when they are used together in a sentence?

    Even you admit you were paraphrasing, so why use quotations marks as if you were making a direct quotation?

    Anyone who cares can go back and read what I actually said. That's why I put the quote here. That's why I put the link here.

    And that is really all I've got.

    Catch you next time.

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