August 24, 2016

SOMETIMES A HORSE IS A HORSE, OF COURSE:

Public Option Would Fix Health Insurance Marketplace (SCOTT LEMIEUX AUGUST 24, 2016, American Prospect)

[D]emocrats should take steps to address the health law's underlying problems. The obvious solution is one that surfaced repeatedly in the multiple draft versions of the legislation that eventually became the ACA, and that is now part of the 2016 Democratic Party platform: a public option. This would entail making a government-operated health-care plan available on public markets. Allowing good public insurance to compete would both ensure that decent, affordable insurance is available in all 50 states, and prevent power plays like Aetna's by making public insurance available as a backstop. If private companies can provide insurance that people want to buy at rates competitive with the public option, good. If they can't, this would also be fine, because the public sector would absorb a bigger share of the health insurance market, a positive development in itself.

What makes the public option desirable will also make it very hard to pass, of course, even in the event that Congress becomes more Democratic and more progressive after Election Day. Insurance companies know full well how a robust public option would eat into their customer bases and profits, and will fight it with everything they've got. Democrats should exhaust every avenue for winning a public option. But if they fall short, there are other ways to strengthen health insurance exchanges.

One of these, which has been advocated by Hillary Clinton, would be to lower the eligibility age for Medicare to 55, down from 65. This would be an easier political lift, and indeed, had it not been for then-Senator Joe Lieberman's desire to stick it to the liberals who had defeated him in the 2006 Democratic primary, it may well have been part of the original health-care statute. Expanding Medicare makes sense regardless, because it would make good public insurance available to more people. Importantly, it would also indirectly strengthen the exchanges by creating insurance pools that, on average, are younger and healthier. It's a win-win that Democrats on Capitol Hill, who are expected to take control of the Senate this fall and may even have an outside shot at regaining the House, should be able to pass.

Other potentially viable ways to strength the exchanges, as suggested by the University of Chicago's Harold Pollack, including making the subsidies available to people purchasing insurance more generous, and providing better compensation for insurers who end up with sicker-than-expected customer pools. As Pollack observes, the latter will be necessary because of a health-care measure approved as part of a 2014 spending bill that largely eliminated the so-called risk corridors that help insurers. The measure was championed by Republican Senator and presidential also-ran Marco Rubio of Florida. Rubio and his allies had framed the risk corridors as an unearned sop to the insurance industry--"a taxpayer-funded bailout." But that claim didn't hold water, because while insurance companies cannot deny coverage to applicants, they aren't actually required to sell on the exchanges. Rather than a gift, compensation for insurers with older, sicker customers ensures that they will remain in markets. Ultimately, Rubio's initiative did more to harm the middle-class people trying to buy health insurance than to the bottom lines of the insurance companies.

Yet another regulatory fix has been proposed by Henry Aaron of the Brookings Institution: expand the coverage pools by requiring everyone purchasing individual plans to do so through the exchanges. This approach is already in effect in the District of Columbia's health insurance exchange, one of the best-run in the country, and has proven to be successful.

Even as Democrats mull incremental fixes, they should keep their eye on what for many progressives is the long-term goal: European-style, comprehensive health insurance coverage.

Yes, the Public Option is a 'Trojan Horse' to Destroy Private Health Insurance (MARK HEMINGWAY, 8/24/16, Weekly Standard)
  

Recently, there's been renewed interest in reviving the "public option." Loosely, the public option is a policy proposal to create a giant government-run health insurer that would compete with private insurers. The rationale behind it is that a publicly run insurance company would be able to operate on lower overhead and provide health coverage significantly cheaper than private insurers.

The idea, which was dreamed up by Yale political science professor Jacob Hacker, first really came to public attention when it was bandied about in the run-up to Obamacare, before being dropped as too radical. However, with the Obamacare insurance exchanges in a precarious position because private insurers are losing money and dropping out of the system, President Obama has renewed calls for a "public option" to provide insurance coverage. Democratic nominee Hillary Clinton has also come out in support of a public option, in part because she was pushed to the left on health in her bruising primary with socialist Bernie Sanders. (Sanders called his program "Medicare for all," and Hacker calls the public option "Medicare-like.")

Majority in U.S. Support Idea of Fed-Funded Healthcare System (Frank Newport, 5/16/16, Gallup)

Presented with three separate scenarios for the future of the Affordable Care Act (ACA), 58% of U.S. adults favor the idea of replacing the law with a federally funded healthcare system that provides insurance for all Americans. 


Trojan horse?  Americans would welcome the public option with open arms.

Posted by at August 24, 2016 12:52 PM

  

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