The Beginning of the End of Private Health Insurance

How Obama's public health insurance option will quickly evolve into the only option

Ronald Bailey | June 9, 2009

In his weekly radio address on Saturday, President Barack Obama declared that "it's time to deliver" on health care reform. In a letter to Sen. Edward Kennedy (D-Mass.) and Sen. Max Baucus (D-Mont.), President Obama wrote, "I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest." This week Sen. Kennedy released a draft of his proposed "American Health Choices Act" which includes one such optional public health insurance plan. The administration's goal is to report that bill out of the relevant Senate committees by the end of this month.

Earlier this week, Republican lawmakers sent a letter of their own, strongly warning the president that "Washington-run programs undermine market-based competition through their ability to impose price controls and shift costs to other purchasers. Forcing free market plans to compete with these government-run programs would create an unlevel playing field and inevitably doom true competition."

Sadly, we are already well on our way to a wholly government-run health insurance system. After fall, about 47 percent of all health care expenses today are paid for by federal, state, and local governments, e.g., Medicare, Medicaid, and State Children's Health Insurance Program (SCHIP). Establishing a public insurance scheme would dramatically increase the percentage of health care that is paid for by the federal government.

In April, the Lewin Group, a health care consultancy, issued an analysis of how the public health insurance option plan might affect the provision of private health insurance. Currently about 170 million Americans are covered by private health insurance plans, mostly through their employers.

The Lewin Group crunched the numbers through their health care model and found that premiums for the public option plan would be 30 to 40 percent lower than private plans. Sounds great, right? But these lower premiums are essentially achieved by imposing price controls. The Lewin Group assumed that the public option plan will pay doctors and hospitals at the same rates they currently receive from Medicare. And Medicare reimbursements already run 71 percent and 81 percent below what private health plans pay hospitals and doctors, respectively.

First, the somewhat good news. Lower public option premiums and an increase in Medicaid coverage would attract 28 million of the 48 million Americans who currently are not covered by health insurance. Now the bad news. The lower premiums would encourage employers to drop private health insurance and put their employees into the public plan. Overall, the Lewin Group estimates that if Medicare reimbursement rates are imposed, the number of Americans with private health insurance would decline by almost 120 million, leaving only 50 million Americans in the private insurance market.

Defenders of the public option quickly point out that Kennedy's American Health Choices Act promises to pay health care providers 10 percent more than Medicare. But as the Cato Institute's Michael Tanner noted at Cato@Liberty, "When Medicare began, proponents promised it would reimburse at the same rate as insurance. That promise didn't last long." In fact, in his letter to Kennedy and Baucus, Obama explicitly endorsed the idea of setting mandatory physician and hospital reimbursement rates through the Medicare Payment Advisory Commission. In other words, the payments would no longer be merely advisory.

The Lewin Group looked at another scenario similar to the Kennedy proposal, where the public option plan reimbursements to doctors and hospitals were set at the midpoint between Medicare and private plans. In that scenario, the number of Americans covered by private insurance would only drop by 67 million, instead of 120 million. Today, the number of Americans covered by Medicaid is 51 million, with another 45 million covered by Medicare, and 5 million covered by SCHIP. In addition, the Lewin Group estimates that an additional 10 million more would be covered by Medicaid under the Kennedy proposal. So the grand total of Americans likely to be initially covered by government health insurance once the public option is launched would come to 177 million out of 306 million, leaving 103 million privately insured and 20 million still uninsured.

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.

The worst case scenario is that the public option plan would eventually absorb what remains of the private health care system. This could happen as the political constituency for private health care and insurance shrinks while more and more Americans become covered by government insurance. In addition, it will be hard for politicians to resist forcing wealthier patients to join the government plan as a way to make up for eventual shortfalls in revenues.

Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

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SpongePaul|6.9.09 @ 3:11PM|#

Great!
Prostate exams from the DMV!

Billy!|6.9.09 @ 3:18PM|#

When the Dollar finally gives it's last gasp under the weight of commitments like national health insurance will the government still have the wherewithal to pay for my wife's mammograms? 'Cause if not I'm dumping her.

Ivan|6.9.09 @ 3:21PM|#

Is this the coffee line?

Gilbert Martin|6.9.09 @ 3:23PM|#

"It will cost less because the feds will impose price controls on doctors and hospitals."

There are already increasing numbers of doctors who refuse to accept Medicare patients because of the price controls.

How is Obama going to force doctors to accept patients enrolled in his government run scheme?

|6.9.09 @ 3:26PM|#

I'd just like to remind everyone that rather than being "the end of private insurance", it's more like, at worst, the end of private insurance in the United States.

Private insurance still exists in a number of foreign countries, indeed, due to a lack of Medicare and other U.S. style programs, quality healthcare is so affordable in a lot of countries--see Mexico--that health insurance isn't as necessary as you might think. You can just pay cash. I know an endoscopy goes for like $300 U.S.

http://yucatantoday.com/en/topics/medical-tourism-star-m-dica-prepared

The best facilities are on par or better than what most people have access to in the United States.

|6.9.09 @ 3:30PM|#

Because private insurance doesn't impose price controls or rationing.

If anyone is interested, here is a pretty good article about the high costs of health care.

It's a long article, but it's a good read.

|6.9.09 @ 3:32PM|#

Right now, we take decisions out of the hands of doctors and patients and place them in the hands of an HMO-insurance company combo. From one bureaucracy to the other. Wake me up when decisionmaking is truly returned to the individual and his or her doctor.

|6.9.09 @ 3:38PM|#

I am not as pessimistic as Mr. Bailey.

Once people discover that government run healthcare has all the efficiency of the Post Office and all of the compassion of the IRS, they will be willing to pay more in order to get more and better service.

ed|6.9.09 @ 3:39PM|#

Attracted by cheaper government insurance,
employers will dump their employees into the government plan

It's a form of Gresham's law, Ron.
Bad health insurance will drive out good.

|6.9.09 @ 3:48PM|#

Why is that guy putting a sword to that woman's tit?

|6.9.09 @ 3:50PM|#

How is this anything other than charter hospitals? The government gives you a voucher and you take it to your hospital of choice.

|6.9.09 @ 3:51PM|#

Once people discover that government run ___________ has all the efficiency of the Post Office and all of the compassion of the IRS, they will be willing to pay more in order to get more and better service.

1) education
2) security

Those of us willing to pay for better get to pay for both.

Some Guy|6.9.09 @ 3:52PM|#

If someone is going to deny me necessary medical care, I might as well be able to vote against them. "Save our insurance companies" is not going to be a very good argument.

Megs|6.9.09 @ 3:52PM|#

Yeah, yeah, yeah. Let me tell you how much I love my private insurance in (supposedly, wannabe) Single Payer Canada. Hint, it's a lot.

I don't think private insurance will go away in Canada's beard.

|6.9.09 @ 3:59PM|#

Is anyone talking about true free-market health care in the Beltway these days? Does anyone have, and is working to draw attention to, a real plan to get us back to the situation where most routine health care goods and services can be paid for out-of-pocket, and "insurance" is only worthwhile for certain catastrophic events or conditions?

I'm practically deafened by the relentless drumbeat and accompanying chatter for single-payer, and various obvious interim steps toward it. Will ObamaCare handle the damage to my ears?

Some Guy|6.9.09 @ 4:04PM|#

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.

I think that would actually be a major improvement over what we have now. Paying for routine stuff for 100% of the population is probably cheaper than just paying for the non-emergency emergency room stuff for uninsured people. And the private insurers could actually *gasp* compete on quality.

|6.9.09 @ 4:07PM|#

Because private insurance doesn't impose price controls or rationing.

Without RTFA'ing, they can't, not in the sense that the state can.

All private insurers can do is state what they will reimburse and what they will cover. They're only actors in a market. Some may have more market power than other insurers, like BC/BS, and be able to dictate more than other, but practitioners are free to stop accepting that insurance if they determine that doing so will not hurt the bottom line. Many doctors already do this or require their patients to fill out the forms and deal with their insurance.

I strongly suspect that practitioners will either a) have no legal option to not accept gummint health stamps or b) have no economic option to not accept it as it will be the de facto insurer.

BeesInTheBrain|6.9.09 @ 4:12PM|#

Lets not forget that both Republicans and Democrats are drooling of the $226 billion in taxes they lost out on last year because employer provided health care is taxed. Because gosh darn it it is discriminatory to the poor.

Up next, taxing employer matching 401ks because it is unfair to the unemployed.

|6.9.09 @ 4:23PM|#

"Yeah, yeah, yeah. Let me tell you how much I love my private insurance in (supposedly, wannabe) Single Payer Canada. Hint, it's a lot."

They are going to make health care into public education. Everyone will pay taxes to support crappy government health care. This money will be promptly stolen and given to connected chronies and bureaucrats at the expense of quality care(think big city public school system where administrators make two and three hundred thousand a year but there are not enough text books). The upper middle and upper classes will then buy private insurance and go to private doctors to escape the horrible public ones just like they pay extra to send their kids to private school now.

CNich|6.9.09 @ 4:23PM|#

I agree with JW, the government will force the medical practitioners to accept their reimbursements. Most likely they will tie it into license to practice. I have had the opportunity to work with some brilliant(and not so brilliant) individuals regarding free market health care alternatives. Very few believe the government, should they achieve single payer systems, would ever allow physicians to practice outside of their system. They will flex their muscle through regulatory controls and in turn push the ultimatum of play along or don't play at all.

JA Merritt: No one of the Beltway with any say is doing anything. My boss met with four prominent organizations/lobbies several months ago. As he put it, everyone gave him the thousand yard stare when pressed for a real alternative to the current administrations health care plans. The Republicans/conservatives are truly wandering around the woods like children, grasping at reactionary straws. And nobody listens to libertarians...

|6.9.09 @ 4:33PM|#

How does government healthcare competing with private insurance make things more competitive and fair?

The government healthcare would have several distinct and unfair advantages over private insurance. First of all, it is run by the government. That is basically the same as having the referee of the game as you coach. No matter how impartial he claims to be, there is no way he can come through with that promise.

Now that the private insurance companies have unfair regulations on them, they also have to compete with artificially low prices. Everyone, social healthcare sponge or not, would have to pay taxes and therefore fund this endeavor by the beloved leaders. However, income for private insurance is limited to their customers. The architects of this mess like Teddy Kennedy can say that the budget of social healthcare would be limited all they want. They have never shown me any reason the believe them (see Social Security). In fact, people who do not take the handout may end up paying more through government tax breaks and incentives.

Medicare, Medicaid and so on don't work now, why should they work on a larger scale? If something does not work for half the population, why should it work for the whole?

Now let us consider the jobs lost. I don't care how much you work to make the private sector competitive, it cannot compete with this government plan (see above). Sure, some of the insurance workers may be absorbed by the social sector, but not all of them. The immediate cost to business would be decreased because they no longer have to pay for insurance. This too could lead to a minor employment increase. However, our national budget it stretched to its limit as of now. With this bloated new healthcare entity, it cannot be nearly as efficient as the formerly existing private sector. Taxes will need to be raised. As is always is, the hardest hit would be the small businesses and middle class. The backbone of our economy is small business and middle class consumers. If they fall, the economy falls. Now you have high taxes, a collapsing economy and sub-standard, inefficient healthcare. Sounds like good fun.

|6.9.09 @ 4:44PM|#

"The architects of this mess like Teddy Kennedy"

Why are we giving this responsibility to a man with a rotting brain?

|6.9.09 @ 4:56PM|#

Why are we giving this responsibility to a man with a rotting brain?

Why the hell not? We made the brain-damaged Joe Biden Vice President, after all.

|6.9.09 @ 5:13PM|#

The White House may have resort to some edgy advertising strategies to move its health care plan. Check out this parody entitled "Joe Bama 'Smooth Character' Ad Campaign Used to Promote Administration Health Care Policy":

http://optoons.blogspot.com/2009/05/joe-bama-smooth-character-ad-campaign.html

|6.9.09 @ 5:38PM|#

We made the brain-damaged Joe Biden Vice President, after all.

Who the hell is this "we" you are writing about. I am originally from Delaware; there was no way I was going to vote for the Biden asshole.

Stephen Gordon|6.9.09 @ 5:58PM|#

RE: The government will force the medical practitioners to accept their reimbursements.

This spouse of a physician will tell you that the govt reimbursement rates are already too low.

At the rate they are going, student loans for doctors will be soon handled in probate court -- or somehow passed along to the next generation along with the deficit.

I know a lot of docs looking at alternate means of generating income and I certainly don't blame them.

|6.9.09 @ 6:12PM|#

Actually, the cost controls will likely kill the government plan. It'll evolve into a glorified form of medicaid, and most people will end up buying private health insurance anyway.

It's worth noting that Canada saw fit to ban private health insurance to keep people from buying it to use at American hospitals.

Probably wat will happen is that the threshld for being in the public plan will be similar to ublic school. People above middle class will pay to escape from the infrior, overloaded public system.

|6.9.09 @ 6:17PM|#

They are going to make health care into public education. Everyone will pay taxes to support crappy government health care. This money will be promptly stolen and given to connected chronies and bureaucrats at the expense of quality care(think big city public school system where administrators make two and three hundred thousand a year but there are not enough text books). The upper middle and upper classes will then buy private insurance and go to private doctors to escape the horrible public ones just like they pay extra to send their kids to private school now.

Great minds think alike.
I was thinking this exact thing before I red your post. The public school system hasn't killed private schools, it just creates a two-tiered system. An inferior publicly-run system, and a superior, but more expensive private one.

jpocali|6.9.09 @ 6:21PM|#

I saved or created 2,500 jobs this afternoon! Now honestly, I didn't really create any jobs, and I can't verify which jobs I saved, but the number seems right. Just ask someone who didn't loose their job today. Am I a hero? No. I am just a guy who likes to pull numbers out of his ass and apply them to real word situations.

|6.9.09 @ 6:42PM|#

Yes they do Hazel. Yes they do.

Peter|6.9.09 @ 7:02PM|#

Up next, taxing employer matching 401ks because it is unfair to the unemployed.

Shhhhhhhhhhhhhhhhh!

jpocali, nice work.

On topic, how is it that Democrats are the party of the poor again? "Here's free insurance, I hope you don't die in line before you get to use it!"

Captain Liberto!|6.9.09 @ 8:09PM|#

I'm against reform. Any cheaper and better coverage I would get would likely not overcome my outrage in knowing that all around me parasites and losers are getting care as well!

|6.9.09 @ 9:20PM|#

Under Obamas new plan(s) I would not be alive today to write this comment. Goverment plans only grow and are necessarily political. They will destroy private health insurance and the quality of care we receive today. Look at the VA hospitals. Despite repeated exposees the conditions our vetrans must endure is shameful. My uncle nearly died under VA care until my aunt removed him from their care and placed him in a private hospital. His 3-6 month prognosis changed and they enjoyed over two years together before he passed away - lucid and as comfortable as modern medice could make him.

Alice Bowie|6.9.09 @ 10:16PM|#

Single payer will eliminate millions of jobs in the insurance industry. The fact is, high health insurance contributes to full-employment.

The more i think of it...they should just leave everything the way it is...except for one thing.

If you insurance denies a claim on MAJOR MEDICAL matters...the government should pay. Where will the money come from...LEAVE IRAQ and AFGANISTAN.

|6.10.09 @ 12:21AM|#

It will all be water under the bridge in ten years anyways. Our public and private debtplosion has been on a logarithmic slide upwards since the mid 70's. Logarithms are unsustainable over enough time, and time's about up on the funny numbers that the funny money cranks out.

The current economic problems our country is facing are but the first gag in an eventual spew of pain as our hangover begins. Right now we think all the answers are in a bigger gulp from the bottle, what's one little gag? Party on. First it was "just some beers" now the Stoly has come out - can't have a drink, have to have a drunk...

Now the Stoly is gone and all that's left is a bottle of Everclear. Its filled with toxic feel good - carbon credits, nationalized health care, banks, automobiles, education, a couple more wars etc. - that's a a very high proof bottle right there, yum. Well, desperate times call for desperate measures, as the best drunks like to say.

Every drunk does this before they finally pass out and have to wake up sober. We're entering the part where the drinking hasn't stopped but the best fun you can wring out of drinking has stopped. Enjoy the headache, mates.

|6.10.09 @ 2:01AM|#

If price controls are put in and providers are paid less for providing medical care than 3 things for sure will happen.

1. Lower revenues to the providers means that if they are a private facility that they must cut costs. This will mean paying their doctors less or higer fewer doctors and also spending less money on medical equipment. The net result is that waiting times for hospital beds and operations will be longer and the care provided for the procedures will be less than they would have been with more and better paid doctors and better equipment.

2. Drug and medical device companies will have less revenues as provides pay less for drugs and buy less meedical quipment. The Drug and meeical equipment companies will lay off thousands of employees in order to cut cost. This will reduce the money spent on Research and Development. With less money spent on R&D fewer life saving and life extending drugs and equipment will developed and those that are will take longer to develop.

3. The net result of all of this will a significant reduection in health care services. This will lead to more people being sick and dying earlier than would otherwise be the case.

So the bottom line for this is that again the producers and middle class will wind up with inferior health care while those at the bottom of economic pole will get more economic care.

Slavery reparations.

Andrew|6.10.09 @ 2:47AM|#

To solve the debt of medcare and medicate, They nationalize our medical insurance. In a few years to meet their retirement obligations, they will nationalize our 401k and roth IRA.

|6.10.09 @ 2:57AM|#

Is anyone talking about true free-market health care in the Beltway these days?

Ron Paul is, but he's about it.

-jcr

|6.10.09 @ 3:09AM|#

I am just a guy who likes to pull numbers out of his ass and apply them to real word situations.

Joe Biden?

-jcr

|6.10.09 @ 7:48AM|#

Most of the biggest killers in this country are preventable diseases related to diet and exercise.
I wonder how long it will be before those caring people in government decide to cure these diseases.
My guess is they'll pass legislation making it a crime to ignore a doctor's orders.
Come in for the followup exam, doctor sees you haven't changed your diet and started exercising, and you get carted away to health camp.
It will be for our own good, it will solve everything, it will be wonderful, it will be terrifying.

DrBobbs|6.10.09 @ 8:43AM|#

While I'm concerned about what would happen if the government took over healthcare, it should be noted that most of the problems associated with such a takeover already exist with private health plans.

It is routine for private health plans to refuse to pay for medications, treatments, and tests that doctors deem necessary. At the same time, insurance premiums keep going up.

The best way to avoid nationalized medicine is for private insurance to demonstrate how good it is at giving patients more healthcare for lower cost. At this point, the opposite is happening.

|6.10.09 @ 9:01AM|#

Any time you think that a government run plan is good, look at it in the context of someone else having the monopoly, i.e. a single insurance company. Having that single insurance company run by the government doesn't make it any better - a lack of choice is bad and a lack of competition means that a bureaucrat, not the market, makes the decisions on what is covered.

spambot|6.10.09 @ 9:03AM|#

http://gmy.news.yahoo.com/v/13901872

Main point left out of this pro-national health "news" is that Tennessee already HAS a healthcare for those who can't get insurance. It has had it since 1994 when they took the Hillary plan and implemented it lock stock and barrel and it has not done the job.

http://en.wikipedia.org/wiki/TennCare

I would think that would be important to know.

|6.10.09 @ 9:20AM|#

"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."

Isn't that just a little disingenuous? Aren't those decisions currently being made by insurance company bureaucrats, not doctors and patients?

By the way, who funds the Lewin Group? Isn't it United Health Care?

|6.10.09 @ 9:24AM|#

Why doesn't Obama just go ahead and implement socialised medicine and create a system similar to the NHS in the UK? This idea of socialised healthcare competing with privatised healthcare makes no sense. You either have it one way or the other. This goes for future Republican administrations, privatise healthcare or socialise it!!!! The two forms don't mix very well.

|6.10.09 @ 9:27AM|#

Lets hope we don't get socialized health care.

But some of the debate should be about how to reduce the incidence of disease. There is a way. Read the China Study; it is the largest study of disease causes ever done.

The China Study, done in China, Philipenes, Japan and the US, found that populations that do not eat more than about 6 percent of calories from animal protein - meat, dairy, and eggs - do not get the Western diseases of affluence.

People who eat mostly plant based foods such as rice, potatoes, corn, grains, beans, vegetables and fruits, are free of the major killers of Americans and Europeans - they are free of heart disease, cancers, Type II diabetes and others.

|6.10.09 @ 9:34AM|#

So, the Dems will take even more of my income (I work unlike most Obama voters I know) with increased rates, taxes on my health care benefits, a new VAT tax and increased sin taxes. Then the dems will force me into substandard health care with rationing and prevent me from paying out of pocket for better health care. Anyone that voted for Obama is an idiot- too everyone including the generation is going to suffer.

|6.10.09 @ 9:37AM|#

If the Government Bureaucrats run my health plan, and Private Insurance Companies that currently employ millions all go belly up, how much will my taxes go up to pay for all those unemployed in this industry ?

|6.10.09 @ 9:44AM|#

"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."

I wholly disagree with that evaluation: As an American living in Germany, I can attest that the German people and Americans living in Germany are quite happy with the German system: It works, and you don't have to fear losing coverage in case of a layoff.

Yes, you can buy private or regulated insurance, and there is a bit of extra privilege with the private. But the regulated insurance coverage is EXCELLENT and involves virtually no paperwork with respect to expenses.

Indeed, I am planning to move back to the US; but the main issue delaying me is the question of how I will obtain health coverage if I don't have a job, or if the insurance companies discover some kind of "pre-existing condition" in my medical history. It's a real concern for someone wanting to be more entrepreneurial instead of sheltering under a big corporation's umbrella.

|6.10.09 @ 10:05AM|#

Be it public or private, having insurance gives third parties a say over your treatment options. That's a feature of the system, not a bug. As I see it, my choice would be between someone at a private company who has a cash incentive to deny me treatment and a bureaucrat who gets the same salary no matter what.

Given that reality, I'd need a really good reason to embrace the former.

|6.10.09 @ 10:19AM|#

Let's not forget about the existing unfunded liability of Medicare, $29,700,000,000 in 2005, increasing $2,000,000,000 every year.

I'm sure they'll do a much better job controlling costs *this* time.

|6.10.09 @ 10:30AM|#

Well reasoned but lacking in alternatives. Government inefficiency vs. insurance company greed -- I choose government. At least I can vote to change them. What does it say about our society that we have an entire industry devoted to profiting from peoples' medical suffering? Disgraceful.

Michael Ejercito|6.10.09 @ 10:42AM|#

There are already increasing numbers of doctors who refuse to accept Medicare patients because of the price controls.

A solution to that would be to make it a capital crime for a doctor to charge above a certain price for a given service.

I wonder how that would work.

Michael Ejercito|6.10.09 @ 10:43AM|#

Given that reality, I'd need a really good reason to embrace the former.

Two words:

King Drew

|6.10.09 @ 11:21AM|#

All this sounds wonderful!

It is high time we got rid of these health insurance companies who add absolutely no value to anyone (except themselves and their stock holders).

Health insurance companies are sucking the blood of Americans - their whole agenda is to deny health care, not provide it while collecting huge premiums.

|6.10.09 @ 11:31AM|#

Dave--Have you ever considered that your insurance company simply sucks? Mine pays out.

|6.10.09 @ 11:37AM|#

Some of you people are so stupid. You actually want the government to control more of you life. To the guy that trusts government employees b/c they get paid the same rather than private companies who get incentives todeny treatment- you are a fu&king moron. That why you need competition in health care so when they mistreat their insureds, they lose customers. With a government run monopoly on health care, there is no incentive to improve. The elected officials will steal their fair share before you vote them out. Take an economics class instead if listening to Radiohead and better yourself. You stupid sh:t. Keep buying the liberal tripe and choke on it- Obama voter idiots. Turn us into to Europe - who is actually waking up and turning from their liberal disaster towards fiscal responsibility. I'm tired of paying for Obama ideologes and lazy asses who don't work.

|6.10.09 @ 12:02PM|#

If auto insurance excluded 1/6 of driver the revolution would start yesterday! I hope we see the end to private insurance as it currently stands soon. It is a market which does not function correctly. It needs to be fixed. Right now the private insurers have the opportunity to implement changes to cover more people and restructure the out of control pricing system but they don't. Special tax breaks for employers and employees horribly distort the market for individuals which causes so many to be unable to participate. It is not defensible by saying its a free market because it is NOT. It is like all our markets, tainted and distorted by tax rules which favor some at the expense of others. Fix the tax code so the playing field is fair. Our tax code does more harm to the free market system than I ever hear about in the press.

|6.10.09 @ 12:58PM|#

"Today, the number of Americans covered by Medicaid is 51 million, with another 45 million covered by Medicare, and 5 million covered by SCHIP. In addition, the Lewin Group estimates that an additional 10 million more would be covered by Medicaid under the Kennedy proposal."

These numbers are not mutually exclusive. Almost everyone over 65 has Medicare. If they are indigent, they also have Medicaid. And if they or their family can afford it, they also have "gap" insurance which looks like a "private insurance policy" in the numbers you were providing. My wife's Grandmother had to go into indigent care at 94 years of age (passed at 102). For 8 years, she was enrolled in all three of these programs and exchanged her Social Security for the space in the care center. We will need to do a better job of counting (or we will overcount) how many people are actually covered.

Initially, many people will end up with all manner of cross-overlaps in these "who is insured by what program" counts. Then, as companies push their retirees and lower paid workers off of company-paid insurance with no real reimbursement, the income tiers will sort themselves out.

|6.10.09 @ 1:06PM|#

I can't wait. Insurance companies are thieves. They deny coverage based on pre-existing conditions and often deny coverage of procedures.
The drive doctoers nuts with a gazillion non-standardized forms and require "please oh please" phone calls from the doctors' offices.

I have been on Medicare for several years and have NEVER had a problem of ANY kind. I also get my meds from the VA for $8 per 30 day supply by mail regardless of the prescription market price for suckers.

The sooner this pain for profit industry evil is killed the better.

|6.10.09 @ 1:26PM|#

It will be a jolly good hoot if the government links medical licensure to participation in a government-run health car plan in an effort to eliminate competition in the private market. We already have massive doctor shortages in numerous states around the good ol' U.S. of A., so I can't wait to hear from our dear leaders on how they are going to get prospective doctors to go to school for ten years or more so that they can make the some salary as a public school teacher in North Carolina. Wait, wait, I know: The young, hip, clever, and politically astute Obama-inspired legions of young people will put aside the fact that they are soon going to face exorbitant marginal tax rates and a diminished quality of life and sign up to go to school into their early-to-mid-thirties!!!

Of course, I suppose an alternative is the mass importation of the Dr. Nick Riviera's of the world.

Sing it with me:

"The knee bone's connected to the...something. The something's connected to the...red thing. The red thing's connected to my...wrist watch. Uh-oh."

I mean, won't it be fun wondering what the medical credentialing system REALLY is for "doctors" from Bangladesh? Imagine the good times had by all when the whole family can all join in on the "What-the-fuck-language-is-my-doctor speaking" game. What could be more fun than wondering if the Pakistan-born-and-raised doctor is going to later end up on the battlefield of the Sway Valley? ("Lemme tell you about doctor shortages...") Or how about playing the game "Is that lump in my breast really getting bigger after all of these months?"

So, even though there will be the hilariously predictable doctor shortages in a parallel government-run system, I just can't see the white, upper-middle class Obamatons reaching down to grab their ankles in a forfeiture of a private or cash-only health care system simply because "Joe Cool Obama" is a handsome black guy. I know these folks are loathe to be called "RACISTS!" for not endorsing the whole kit and kaboodle of Obama's domestic agenda, but I also don't think the Nancy Pelosi wannabes of the world want to take their ticket and wait in line for months for a mammogram or cervical examination behind some four-hundred-pound redneck from the hills of Appalachia...

|6.10.09 @ 2:35PM|#

And the US private insurance industry does not attempt to impose price controls? Are you kidding me. They spend a vast part of their revenue paying armies of people to do just this. I know two of them. I also wonder whether Mr Bailey has ever had any involvement in the healthcare industry. It doesn't sound like it. It's the usual brew of distortion, exaggeration and fearmongering that is swallowed by some like Petomane who sound as if they need medical attention.

|6.10.09 @ 3:01PM|#

It seems like there is a pretty easy fix though. Write into law that the public plan would have to pay say average cost + 5-10%

Cost could be determined by taking a national average, and would include things like overhead etc.

Providers that could provide at a lower cost wouuld make extra profit, but over time that would drag the average down, thus resulting in savings.

Also, I think Medicare etc should have to do the same. IMO, it's bullshit to remiumburse less than cost. That's just a hidden tax on private insurance premiums.

|6.10.09 @ 3:14PM|#

Before my twin daughters were born (19 years ago), we had our neonatal care done while I was on contract in Sweden. The total out of pocket cost was $750 for 4-5 months of care. We came back to the US for the delivery because my spouse wanted to go to her regular OB-GYN. The 45 minute ceasarian section cost $10,000 (the max that the insurance company would pay). The doctor could have charged more, but he liked us. I know its complicated stuff, but our prices are way out of whack. Conservatives like to say that the private sector is ALWAYS better, this is Obama's challenge for them to put up or shutup.

LarryA|6.10.09 @ 4:04PM|#

The Republican letter to President Obama presciently warns that a government insurance option will create a fatal dynamic, the end result of which "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."

How, in the viewpoint of President Obama, is this a warning? He sees government control as a feature, not a bug.

How is Obama going to force doctors to accept patients enrolled in his government run scheme?

With a federal law?

The best way to avoid nationalized medicine is for private insurance to demonstrate how good it is at giving patients more healthcare for lower cost. At this point, the opposite is happening.

One of the main culprits is once again the government. Look at insurance regulations. (Not read them, no one can do that. Just glance at the several-page table of contents of the Texas Insurance Code.

I would think that (the failure of TennCare) would be important to know.

It's important for them to know. They have to make sure The Right People are in charge this time. It isn't important for you to know. You'll just vote the wrong way.

If the Government Bureaucrats run my health plan, and Private Insurance Companies that currently employ millions all go belly up, how much will my taxes go up to pay for all those unemployed in this industry ?

There will be no unemployment. Government programs always use more workers than civilian companies, usually by an order of magnitude.

Be it public or private, having insurance gives third parties a say over your treatment options. That's a feature of the system, not a bug. As I see it, my choice would be between someone at a private company who has a cash incentive to deny me treatment and a bureaucrat who gets the same salary no matter what.

The problem with most health insurance is that you don't buy it, your employer does. The insurance companies cater to what the corporations want, not the employees. I just had to file an auto insurance claim. The folks in both companies, mine and the one covering the person who collided with my wife (minor fenderbender, she's okay) bent over backward to settle the claim fairly. They did so because auto insurance companies have to directly compete for my business. That's what we need in health insurance.

|6.10.09 @ 4:53PM|#

"Well reasoned but lacking in alternatives. Government inefficiency vs. insurance company greed -- I choose government. At least I can vote to change them. What does it say about our society that we have an entire industry devoted to profiting from peoples' medical suffering? Disgraceful."

You think you can vote to change them. The problem is that overwhelming majority of the candidates you have to choose from will do nothing to correct the inefficiency, be they Democrats or Republicans.

|6.10.09 @ 5:05PM|#

IMO, a signficant amount of the insurance problems result from insurance companies becoming to good at selecting their customers.

This could be fixed with an indivdual mandate, combined with mandatory acceptance by companies.

People could opt out by going to a judge and swearing not to take any medical care that wasn't paid for in advance (including ER).

|6.10.09 @ 6:20PM|#

You make all sorts of assumptions about what the public plan will do to health insurance, and you assume that people will gravitate away from the "quality" healthcare of their private insurance to the public plan because the employers will drop the private plan for the public plan. So, if it costs me 30% of my income to provide health insurance to my employees, sure that will happen. That is part of the problem, on top of the lack of coverage for the most vulnerable of my brothers.

Gabe|6.10.09 @ 10:26PM|#

This article is spot on. Once govt sticks its hands in something it eventually squeezes out the private sector. Look at what is happening now with GM and Chrysler. But for better examples of HC madness look at Canada and the UK. Universal HC will not be that immediately but eventually bit by bit the private insurance providers will be unable to compete with govt plans until they either fold or merge into the govt plan. Once that is done we are all provided care by the govt.

|6.11.09 @ 10:06AM|#

Here's what Obamacare will look like:

"Health Care Ration Book"

http://smartgirlpolitics.ning.com/forum/topics/health-care-ration-book

The Rational One|6.11.09 @ 12:34PM|#

What? No mention of how 68% of bankruptcies in this country are due to medical bills? And that most of these people have or had insurance? I would expect nothing less from reason than this type of one-sided propaganda regarding the health care issue.

mark|6.11.09 @ 1:30PM|#

To disgruntled conservatives: I suggest you consider the Patients' Choice Act and call your Congressman!

|6.14.09 @ 5:19PM|#

Maybe I sometimes see things in overly simple terms, but is seems to me that the subject of healthcare brings out alot of whacky arguments. No libertarian should be defending the current system, which has very little to do with the free market. If we can't turn the patient into the buyer, the government will eventually take over because rising costs will break the whole economy. Sooner or later somebody is going to ration healthcare. It's bound to be either a private or public insurer, or it's going to be the patient who is paying the bill. I hope we can agree that it ought to be the patient, but there will be a ton of resistence because rich people will get better care and that offends our sense of entitlement. I like health savings accounts, but they work best for young/healthy people.

|6.15.09 @ 6:53AM|#

Is that a typographical error in paragraph 5? It says Medicare pays at 71 to 81 percent less than what private insurance pays. In fact, Medicare pays about 80 percent of what private insurance pays.

Most people want a public plan because they see the free market as encouraging operations whose fiduciary responsibility is to their stockholders and managements, rather than to their customers. As a result much of the 32% overhead the private companies incur is used to hire people to deny care, then deny payment, until they are forced to disgorge the money they were legally required to pay in the first place. Private health insurers pay their upper management very well, as well. Many people now refer to them not as health insurers, but as health deniers.

The problems conservatives project, e.g. not being able to select your own doctor, long waiting periods for care, are already common. Most people with private insurance are required to use doctors chosen by the insurance compaines. The long waiting peiods come from the companies' common practice of denying care for as long as they can, on the theory that premiums paid to them are their profit, not a reserve to be set aside to make payments when the need arises.

|6.16.09 @ 11:43PM|#

President Obama I feel it's a case of:
"THE GUIDE - MISGUIDED"

His spending spree spells "Disastor"

Seriously, The US Healthcare Program is fully
capable of being self-sustainable ONLY if we
proceed in RIGHT WAY. What's That? They are:

*Control UnProductive Administrative Expenses by cutting unnecessary levels/contractors.
*Ensure Full & Proper Payments to Doctors.
*Scrap ILLEGAL IMMIGRANTS and issue qualified
Work Permits for specific JOBS to enable them contribute to our Healthcare System.
*Set up "MalPractice Board/s" to review cases & Scrap Insurance that engages Doctors into
unnecessary litigations.

Based on the above premise A SOLID PLAN COULD BE DESIGNED THAT WOULD BE SELF-SUSTAINABLE.

|6.17.09 @ 9:41AM|#

When you can't find a doctor because so many have left their practice go luck!

If we didn't give free medical to immigrants/illegals we would not have this problem.WE THE TAX PAYERSHAVE TO PAY FOR EVERYONE ELSE ......
I can't get free medical, my parents who were born in the United States, my grandparents were born here.. NOBODY got FREE medical until they
were 65..

|6.17.09 @ 4:30PM|#

We are experiencing a WORLd CLASS example of "How to cook a frog." You all are the frogs, and the big ZERO is the pot. Sadly, I am a frog who wants out of the pot - but all you Obama/socialist/national health care hopers will rue the day you let yourself be cooked. When you are 70 and the man in Washington tells you that your life saving proceedure is too expensive, and for the betterment of all the other frogs it best you DIE! Who do you turn to? Huh! You see, all you will be able to do is die, and not live the extra 20 years you would have if you were not a COOKED frog. Sorrrrry!

Rick Monroe|6.17.09 @ 4:53PM|#

Most of you people are so stupid you can't even spell or write english! No wonder you're against real universal health care and you still suport a "for profit" insurance industry. What don't you understand in the phrase "FOR PROFIT"? All health insurance carriers will try deny your claim so they can make money. Wake up and stop watching FOX news you ignorant, right-winged, brain dead robots!

|6.18.09 @ 9:30PM|#

... taking decisions out of the hands of doctors and patients and placing them in the hands of a Washington bureaucracy...."
Come on, people, wise up! These decisions are not in the hands of doctors and patients today, they are in the hands of for-profit insurance companies who care more about their bottom lines than they do about our health.
Take a poll of other developed countries, most of which have long ago created a singe-payer, universal coverage system, and ask them how many of them would like to exchange places with our system? Go ahead, ask them. Why is the US always last in line when it comes to recogizing basic rights, all our rhetoric notwithstanding? Oh, yeah, I forgot - fair and balanced - NOT.
Again, people, wake up - the middle class is just one serious illness away from bankruptcy. Why should we, in the USA, alone among developed nations have to bear this burden?

|10.18.09 @ 4:20PM|#

What exactly is the value added by private insurance companies that economically justifies their existence? If the best you can come up with is "They encourage technological innovation that a few high income people with luxury plans can afford" I'm afraid I won't be sorry to see them go. Under the "worst case scenario."

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