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Posted by on Jul 1, 2009 in Economy, Health, Politics | 64 comments

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.

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