I am trying to follow the health care reform debate with some difficulty, not the least because of the rather spotty and sensationalized reporting in the major and online media. I guess I think I know something about it, as a physician and medical school dean, and having read about it a fair amount over the years, but it's complex.
I recently have been more paranoid than I usually am (and when it comes to insurance industry I'm pretty suspicious) about the strategy of the insurance industry with health care reform, and I feel my democratic and progressive allies may be failing to think on the same devious level I am. That is, that the pubic option, as important as it is (I'm totally behind it if we can't get single payer on the table) is a trap being prepared by the insurance industry to:
a) discredit health reform in general and the pesky progressive people in particular
b) to assure greater and greater profits in the future.
How would that work? what has always challenged medicaid and medicare is that, by not covering the whole population (medicare only greater than 65 and medicaid people who are chronically disabled or impoverished) it is easy to make them look like failures of a government system. In other words, insure the cheapest group to insure under private insurance, and you can bury a whole lot of profits and inefficiency and look good compared to the government.
Now, if there is a regulation with teeth that states insurance companies can't deny based on pre-existing conditions and can't dump people once they're sick, that levels the playing field. So if you are a super wealthy, well funded multi corporate insurance industry with smart cynical people working for you, what might you do about pending threats to your business? You could make a big fuss about a public option (which actually is only a threat to you if you have to compete on something like a level playing field) and then bait and switch on a lobbying congressional level by saying "OK if we have to have a public option, we want a more watered down or removed regulation regarding pre-existing conditions and patient denial for major illness."
If that is worked out, then the public option becomes burdened with a very disproportionate load of risk and expense, and it is super easy to undermine it from the standpoint of the insurance industry. Even better, they don't have to carry the more expensive end of the health care cost of the country because it has all been shunted to a public option! Sweet, huh? I think they are laughing up their sleeves at us. So what should we be doing?
Obviously, make sure the pre-exisiting and patient dumping regulations have really sharp teeth and strong jaws to them. Second, start talking publicly about why public options and single payer plans work well in other countries (and they do). They carry the whole risk pool! If a public plan carries everyone and not the selected most costly ones of us who need care, then the overall cost is distributed across the spectrum, and it is relatively easy to control cost, with relatively less rationing of care.
A public option has to be very competitive to achieve this, I think. But it wouldn't take much, because underneath all the industry bluster and lies is the fact the american health insurance industry is pretty disgraceful as businesses go. Very high administrative costs and low payouts. Arbitrary and unfriendly user interface and lots of ugly experiences. Still, a tiny poorly funded public option might be doomed, like any under capitalized business, to look bad and confirm the biases of the anti-public infrastructure crowd. Think about it, ask your congressional representatives and the Obama administration if they've got this perspective in their strategy.