Why do we need a public option? President Obama tells us that we need the public option in order to keep the health insurance companies honest. The problem is, he doesn’t really explain how they are being dishonest now, and how the public option will prevent the current shenanigans. He also doesn’t explain why the insurance co-ops won’t do the same thing. So, I’m going to try to take a stab at it here.
Right now, health care insurers work like a virtual monopoly. They simply don’t compete in many areas. That’s because they are afraid that if one of them starts to clean up it’s act, they’ll all have to follow suit, and that would me lower profits for themselves and their share holders. So you don’t seem them advertising about how they’ll drop pre-exisiting condition clauses, or guarantee that you don’t lose your insurance when you get sick. The best way for them to make profits is to collect as much money in premiums as they can, without paying any of it out. That way, money can be paid to stock holders instead of paying for patient care.
I love the idea of insurance co-ops, and it’s one of those things that should have happened a long time ago. In a co-op, just in a banking co-op, the insurance company will actually be owned by the customers. If you are paying in on an insurance policy, you are a part owner of the co-op. There are no share holders, so all the money, in theory, can be used to run the company and pay medical bills. The problem is that co-ops will be under exactly the same pressures as the private insurance companies. They will quickly realize that they will have lower costs if no one is sick, and since healthy members will outnumber sick ones, it is easy to see what could happen. Insurance co-ops might become even more draconian than the private insurance companies when it comes to trying to keep sick people off the rolls.
The public option would give us an insurance plan run by the government that would never refuse someone, and could provide good basic care at reasonable prices. In order to be attractive, private and co-op insurance would have to beat the public option.
Just by having the option in place, a lot of waste will go away. We won’t have hospitals constantly trying to shuffle poor and homeless people out the door. The hospitals won’t have their emergency rooms crowded with people who may or may not be able to pay. Since people will have insurance, hopefully they will go to doctors before they get so sick they need emergency services. That might actually make it easier to get care
There are a lot of details to be worked out, but I believe that the best system right now would include a public option and insurance co-ops and that they should be given as much freedom to compete against private companies as possible. There also need to be provisions that will keep private insurance companies from just dumping expensive patients into the public and co-op systems. But I think we have a good start here, as long as we hold onto the public option.
Unfortunately, the option I think is the best, a single payer system where we can choose between a number of insurance companies, including public and co-op, but it’s all paid for by the government, is apparently off the table. You don’t hear about this much in the press, but if you look at the boards of directors of media companies and those of pharmaceutical companies, it’s not hard to figure out why. Take a look at this article for more: Single-Payer & Interlocking Directorates
There is a lot that can be done directly, but the various special interest want to cloud the issue so as little as possible is done. For instance, we could simply pass a law that says that insurance companies can not pick and choose. If an applicant can pay the premiums, the insurance company must accept them. No forcing people with pre-exisiting conditions to wait a year or two before they are covered. As long as you make the rules the same for everyone, it would work just fine.
