Special Report
We’ve Long Had a Public Option
Non-profits already provide the “public option” Obama says he wants.
President Obama and the far-left in Congress say that a “public option” health insurance plan is necessary because the profit motive results in too much coverage denial, therefore America needs a non-profit option to “keep the insurance companies honest.”
In Colorado, Obama explained it this way:
The argument around public option is, should one of the choices — not the only choice — but one of the choices on that exchange be a public option? And the idea here would be that a government-run non-for-profit would have its own option that people could sign up for — they wouldn’t have to, but they could sign up for it — and if it could keep its costs lower and provide a good-quality service and good benefits, then that would help keep the insurance companies honest because the idea being — the idea being that as a non-for-profit, potentially with lower administrative costs, they could do a good job.
Rebutting concerns that the public option would be a government-subsidized plan, Obama has said repeatedly that it won’t be. Rather, it would function as a nonprofit insurer.
He said in Colorado, “a public option can only work if they have to collect premiums just like a private insurer and compete on a level playing field.”
If that is true, then there is no need for a public option plan because roughly half of Americans who have private health insurance get it from the same type of entity Obama says he wants to create — a nonprofit insurer.
According to the same Census report that produced the figure of 46 million uninsured Americans, 202 million of us are covered by private insurance. According to the Alliance for Advancing Nonprofit Health Care, an industry group, “Of the 138 health plans in the United States with at least 100,000 medical enrollees, 84 or 61% are nonprofit.” Nearly half — 48 percent — of the people covered by the country’s 138 largest insurers are enrolled in a non-profit health plan, the Alliance reports. That’s 97 million people. That doesn’t include those covered by small, non-profit insurers.
Advocates for left-leaning health care reform like to target the small-group market, meaning the market for small employers, usually defined as businesses with fewer than 100 employees. They often cite a shortage of competition in this market as a reason or the primary reason health care is so expensive and there are so few options. Fingers are usually pointed at big, for-profit insurers. Conveniently ignored are the big non-profits.
The Congressional Budget Office surveyed the small group market in 2005, and reported this finding:
Thirty of the 40 states supplying information identified a Blue Cross and Blue Shield (BCBS) carrier as the largest carrier offering health insurance in the small group market, and in all but 1 of the remaining 10 states, a BCBS carrier was among the five largest carriers.
The median market share of all the BCBS carriers in the 34 states supplying information was about 44 percent, with a range from about 6 percent in Wisconsin to about 93 percent in North Dakota.
The idea that for-profit insurers control the market with no serious nonprofit competition and therefore need a non-profit to “keep them honest” is nonsense. Nonprofit health insurers such as Blue Cross/Blue Shield and Kaiser Permanente already cover scores of millions of Americans and are often the dominant insurer in a given state or region.
And that doesn’t even get into the issue of nonprofit health care providers, which often dominate care in large portions of the country. For example, Excela Health is the sole health care provider, and the largest employer, in Westmoreland Co., Penn., the largest county in the state.
Now, there are lots of reasons why nonprofits might function essentially as for-profits when it comes to health insurance (the need to avoid becoming a dumping ground for the sickest of the sick, for instance). And there are lots of reasons why nonprofits might not be able to offer significantly cheaper alternatives (state coverage mandates, for instance). But no one is proposing reforms that make sure nonprofits are fulfilling their stated missions (and thus justifying their tax-exempt status) by actually offering low-cost coverage for high-risk populations. And no one is talking about bringing for-profit hospitals or physician networks to compete with monopoly or dominant nonprofit hospitals and physician groups.
Instead, they are attacking for-profit insurers and suggesting that the profit motive itself is the real masked villain here. That argument simply doesn’t hold when one realizes how much of the market nonprofit insurers (and providers) claim.
What President Obama and the Democrats want is not a nonprofit alternative to for-profit insurers. The United States is chock full of those. They want a government-run alternative. But the type of alternative Obama claims the “public option” would be already exists. So what, one wonders, is he really trying to create?
About the Author
Andrew Cline is editorial page editor of the New Hampshire Union Leader. His Twitter ID is @Drewhampshire.
Letter to the Editor View all comments (31) | Leave a comment
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Tim F| 8.19.09 @ 10:11AM
Andrew Cline is smart enough to know the answer to his own question. What he (Obama) is really trying to create is a government run "option" that will be able to use the coercive powers of government dictate coverage and cost terms to providers and members, using Medicare as the pricing model. The short term result will be massive cost shifting to private plans. The long term result will be the elimination of the private plans altogether, thus completing by stealth the government takeover that can't be accomplished forthrightly because people simply don't want it.
Tenn Slim| 8.19.09 @ 10:22AM
ALL
Vermont State is full of Non Profits, as well as NGO's. ALL operate under the agis of serving the public a SPECIFIC need. All, without fail, have enormous assets, to the tune of Billions of Dollars. The whole state has a sub culture of folks that make a decent living seeking grants, aid, funds from foundations, government programs, etal. Add to this mix is the Vermont State run health care. Admittedly it is a good provider of health care needs. Only due to the fact that the University of Vermont runs the actual health care provision. Some really good doctors there.
BUT, the Non Profits, NGOs and their attendants drive the effort. It is a whole cradle to grave state, dedicated to non growth, stable IE: no Changes to status quo, state. A dedication like this across the USA would regress any effort to progress, under any terms. Even the most ardent progressive would chafe under Vermonts Rule.
end
Semper Fi
Al Adab| 8.19.09 @ 10:27AM
Many local and regional hospitals operate in this fashion. Why could not the centers operate as regional co-ops providing services through perhaps a PHO or similar structure? In many areas regional hospitals even have taxing districts wherein they levy (or could) a general property tax to cover expenses O&M. Certainly a local or regional approach would fit the bill.
If in fact the major concern is pre-existing condition, those already diagnosed , and how individuals can maintain coverage for those disorders then it seems that moderate cost sharing on the local or regional basis might provide an answer. Existing co-ops serve many members at relativly low monthly cost.
Major cities are replete with hospitals while rural areas have, for the most part, regional institutions. If organized in a fashiod similar to that outlined above the provision of care would seem assured.
gill.Oteen07041776@gmail.com| 8.19.09 @ 10:33AM
If obumassiah and his psychophantic remoras have their way with us, all health insurance companies will be non-profit. Besides we already have a single-payer system. The American taxpayer. Be sure to thank one today!
Gill O’Teen ✝✡
gill.Oteen07041776@gmail.com
Don’t Tread on Me!!
Dan D| 8.19.09 @ 11:37AM
One correction, Westmoreland County is not the largest county in Pennsylvania. Philadelphia County is by far the largest county in population, and Lycoming County is by far the largest county in area.
Ken (Old Texican)| 8.19.09 @ 1:00PM
Mr. Cline Thank you for pointing out the "non profit" insurance options available.
I have often wondered that it wasn't brought out before now.
I thought everyone knew.
Also the "pure" mutual insurance companies have NO shareholders. Any excess premium is dividended out to the policy owners.
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The American Spectator : We've Long Had a Public Option | AlternativeInsuranceGuide links to this page. Here’s an excerpt:
Russ (Wisconsin)| 8.19.09 @ 6:05PM
What really scares me is the motivation driving the Obama administration and Nancy Pelosi. Is a public option another payback for unions that provide healthcare coverage for their members which include many more unions than the UAW? First Obama gives GM & Chrysler to the unions for their healthcare obligations then turns around and nationalizes healthcare. This could be why the Democrats wouldn't be afraid of the 2010 elections after snubbing the revolting populous. The unions will be falling all over themselves supporting the Leftie candidates.
David Klein| 8.19.09 @ 6:12PM
At the request of Blue Cross of California, the National Blue Cross Blue Shield Association changed its by-laws to allow its members to become for-profit health insurance companies. This had a domino effect on other Blue Cross and Blue Shield plans. Soon after Blue Cross of California proposed its conversion, health plans in Missouri, Colorado, Georgia, and Virginia sought to convert. In some of those transactions, state regulators and the community succeeded in enacting legislation or improving requirements to preserve the assets for the public’s benefit.
But lawmakers and advocates in other states were not so fortunate. In Georgia, for example, Blue Cross and Blue Shield lobbyists convinced the state legislature to permit the nonprofit health plan to convert to a for-profit business without leaving any assets for the community. It took three years and a lawsuit before the community was able to unravel the damage caused by that legislation. Again, the battle was worth it—an $80 million nonprofit health foundation was created in Georgia.
Alan Brooks| 8.19.09 @ 6:53PM
These wonky issues are going nowhere. Look, it's not right for me to come here and be strident, I'm conservative but not Republican, and there are many Republicans here. IMO the GOP is now anticonservative, destructive. I don't want to be harsh at AS (like, say, a bloke doesn't go to the New Republic site much if he is a serious Republican).
Nor would it be right to criticize the last administration; as of January 21st, Bush was no longer responsible in any way (if fiscally he ever was). But the question arises of the midterms, and who is going to be Speaker. And 2012. The GOP is so compromised there is no purpose in listening to them. A "Conservative party" can be formed, but it would be rightwing and not conservative.
Obama is doing the correct thing in probing GOP weakness and dissembling. Clinton did the same thing '94- '95. And you cannot avoid the politics of personal deceptio..., er, that is, the politics of personal destruction.
(boy that waa a close one).
Alan Brooks| 8.19.09 @ 7:02PM
you're criticizing Obama too much, which is comparable to the hypercriticism directed at Bush for eight years.
What you are really discussing here is the Welfare state and its health policies or lack thereof.
But the deeper problemoid is that there is greatness in America but no goodness. You all know very well these discussions are rote, with no end in sight for this generation.
The outcome is predictable; another Gingrich will be Speaker in 2011 and the same old platitudes oconcerning the Future and Space Entrepreneurship will be seminared and roundtabled, and focus-grouped, and TVd and radioed unto oblivion.
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HSR0601| 8.20.09 @ 10:40AM
No More Health Catrina !
Let's set up the Equation !
1. All across the spectrum share the urgent need for the reform as the course today is financially unsustainable. By the way, how do we pay for it ?
Let's make it affordable while improving quality.
2. Of all choices on the table, saving via efficiency is the best, and Removing Wastes alone is Enough to Meet the Goal.
As one instance, please visit http://www.npr.org/templates/story/story.php?storyId=111967435, you will be stunned !
No one knows just how much medical fraud there is, and estimates range from $600 to $6000 billion over the next decade lost to it.
And, in May 2009, the Obama administration announced a new task force made up of officials from the Department of Justice and the Department of Health
and Human Services to work on health care fraud.
3. Enough Room For Savings !
Many reformers recognized roughly 30 percent of all health-care spending in the U.S. -some $700 billion a year- might be wasted on medical abuse, unnecessary procedures, unnecessary visits to the doctor, overpriced pharmaceuticals, bloated insurance companies, and the most inefficient paper billing systems imaginable, and payment reform could solve this problem.
Provided the American people pay around twice the amount of the efficient systems, the result is still well below them, the ratio of waste might be estimated to reach far more than 50% in the U.S.
Let's be conservative regarding the ratio. Even If as little as 10% of savings apply to the combined Medicare and Medicaid cost of $923.5bn per year, as of July, the savings of $923.5bn over the next decade are possible.
And when these savings add to the already allocated $583 billion, the savings of wastes involving so called "doughnut hole" , the unnecessary subsidies for insurers, medical abuse, exorbitant costs by the tragic ER visits etc, the concern over revenue might be a thing of the past.
As a matter of fact, with the promising redesign in the pipeline, some patient-focused clinics in 10 regions have already achieved 16% of savings in Medicare while their quality scores are well above average.
Please be 'sure' to visit http://www.nytimes.com/2009/08/13/opinion/13gawande.html?hp for credible evidences !
Thankfully, the provisions in the reform include more expansive, systematic policies such as 'a patient's outcome-based payment system' than they have. I for one firmly believe this American innovation, 'a patient's outcome-based payment system' , is capable of turning profit-oriented practices into patient-focused system / value.
Dr. Armadio at Mayo clinic says, "If we got rid of that stuff (waste), we save a third of all that we spend and that is 2.5 trillion dollars on health care. A third of that and that is 700 billion dollars a year. That covers a lot of uninsured people."
Please visit http://www.kare11.com/news/news_article.aspx?storyid=820455&catid=391 for detailed infos
-- Americans' Best Friends Are The Envy Of The Planet ! --
-- Except For The Underinsured, The Uninsured Alone Outnumber The Entire Population In Canada --
4. Some say, if the reform package is affordable and improve quality, then the inflation/bankruptcy-oriented market can not last, thereby competition should begin with our unfair, unsustainable market value, or let's make another insurer-friendly scheme, even though the inflation/bankruptcy-oriented market share the need for change.
5. CONCLUSION = THE WILL OF REFORM, NOT COST.
The runaway premium similar to the peak fuel price last year and left so many folks in despair insists on staying the course with the attitude 'unchanged', clearly this trend could bankrupt individual, business, and government. Now the government subsequently is tasked with these two main assignments, first, to address premium inflation, second, to expand coverage to all in urgent need.
In order to cover all and not to add to the deficit, the public option can not set the same rates of private market, rather, it needs to have BALANCING function to keep it in check in terms of INFLATION, too. Unfortunately, this 'unavoidable' direction is being aggressively accused by the runaway premium, citing government 'take-over' .
Under the circumstances the energy bill to determine human future and the other major issues are presently piled up, who wants to waste time making enemies ?, which also does not benefit the forthcoming election.
with the heartbreaking tears in mind (Nearly 11 Million Cancer Patients Without Health Insurance), private market also needs changes and should join together to complete this reform , as promised, otherwise, the runaway premium only has itself to blame while new firms are filling the void with competitive deals.
And It can be said that fair competition starts with a fair, sustainable market value.
However, the plan in the House is designed to keep people in an employer-based health insurance system, and the public option would be offered to those for whom employer-provided insurance is not available. And job-based coverage (indirect payment) mandate code, and ample capital, reduced ER costs, IT base to streamline the administrative processes and trim the costs might be favorable to the private market. Over time, supposedly, the public plan will concentrate more on basic, primary cares, and the private insurers will provide their clients with differentiated services.
Let me repeat; No More Health Catrina, No More Bankruptcy Of Middle Class !
-- Americans' Best Friends Are The Envy Of The Planet ! --
-- Except For The Underinsured, The Uninsured Alone Outnumber The Entire Population In Canada --
Thank You !
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Ken (Old Texican| 8.20.09 @ 7:41PM
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Kiss my arse!
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