Back in February 2007, John Edwards was the first of the presidential candidates to make a Public Option Healthcare plan a part of his platform. Discovering that Edwards' idea was popular with grassroots democrats, candidates Barack Obama and Hilary Clinton soon adopted the Public Option as part of their healthcare reform proposals.
What exactly is the Public Option? Simply put, it is a government-run healthcare plan that will compete with private plans, as Medicaid and Medicare now do. Someone has described the Public Option as "Medicare for all Americans". "Medicare allows a free choice of doctors and hospitals... Its premiums and co-payments are much lower than private plans, and its administrative costs run at about 3-5%, compared to about 18-30% for private plans" (Rachel Port, Associated Content). Tim Foley, writing for Change dot org, has the administrative costs at 3% for Medicare, 7% for Medicaid and 15-30% for private insurance.
As you can see, just the overhead cost alone is reason to scare providers of private healthcare plans. For these private sector providers, one of the things wrong with the Public Option is that it threatens their "administrative costs", which may be a code word for hefty salaries and bonuses for CEOs and other big money health tycoons. If I were one of these healthcare CEOs I too would battle any reform that threatens to yank a chunk from my greens (money).
The bottom line for healthcare reform can be summed up in three goals, which are part of the House and Senate bills: (1) control the costs of healthcare; (2) expand access to health care; and (3) improve the quality of healthcare.
The Public Option as part of health reform will achieve seven important things: (1) provide coverage for all applicants, (2) charge the same amount regardless of whether one has a pre-existing condition, (3) not dump the sick or raise rates when a policy holder gets sick, (4) not pay for unspecified medical services, (6) not lose your insurance when you lose your job, (7) not base your premium on your gender (at present, women are charged more than men for healthcare).
In one word, what private healthcare providers fear most about the Public Option is "competition". The same free-market heavy weights who value competition are suddenly dead scared of having to compete with "the government". Ironic.
If the government is such a bad business manager as most people think, then why would healthcare professionals fear competing with the know-nothings of the government? Shouldn't the healthcare pros be salivating at the prospects of running rings around government healthcare?
Could it be that if reform includes mandatory health insurance for all Americans, the private providers may drop their opposition to the Public Option? I think so, because that will mean millions more new customers for the healthcare industry, and that will rake in billions of dollars more in healthcare premiums, a good chunk of which will go for those beloved "administrative costs" (up to 30% of healthcare dollars).
The reality of private and unequal wealth makes it impossible for any government program to destroy any national industry in the United States. Americans who have the money will always opt to pay for Cadillac healthcare plans to suit their fancy.
Even if most doctors and hospitals charged little or nothing for medical care, as long as there are a handful of hospitals and doctors charging for privileged care, the wealthy will choose to pay. Thus there is bound to be private healthcare as long as there is some semblance of capitalism or profit motive left in the American economy. The profit motive is too strong a force to be obliterated by competition from the public sector.
But "The Public Option will drive private health insurance companies out of business. It will result in British-style socialized medicine, which will mean a government takeover of healthcare".
That's the tired argument, and it's about to make me puke. Don't we already have public options in some sectors of America's economy?
Doesn't the transportation industry have a Public Option? Just about every American city has a public transit system. Has that discouraged Americans from using the service of private taxi companies?
Doesn't the retirement industry have a Public Option known as Social Security? Has that resulted in a government takeover of the retirement sector? Has it bankrupted 401K, IRA, Roth IRA, and other market-based retirement plans? Don't wealthy people still have retirement accounts in mutual funds and other investment vehicles?
Don't we have a Public Option in the postal industry? It's called the United States Postal System (USPS), and it has FedEx, UPS, and DHL to compete with. How come those private companies have not closed shop because of all the unfair competition from government-run USPS? In fact, it is the government-run postal system that's been struggling to stay afloat by constantly raising the price of stamps.
Am I missing the point about the Public Option? Is it really the nuclear option, the death nail to private health insurance in America? Somebody educate me, please...
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