On a day in which the Senate Finance Committee proposal to exclude a Public Option is getting either green or at least no red lights from the White House, Harry Reid, John Kerry!! and (who could have predicted?) the jubilant stockholders of American insurance companies, Ezra Klein tells us that it wasn’t the most important element anyway.
Klein’s argument is that other things are much most important, and he proceeds to list several horrors of the current private insurance system that need to be fixed. I agree the current system is a horror, but what does that tell us?
Most of the horror stories we’ve been hearing are about the for-profit insurance system: the fact the current system has left millions uninsured leading to thousands of deaths and a million bankruptcies; millions more fraudulently insured when they find out they’re not covered when they’re sick; insurance costs too high for businesses and individuals; no incentives on provider cost reform coming from private insurers; consolidations and concentration in the insurance industry allowing them to raise premiums, fix prices and strangle competition.
Sure, fixing all of these horrors is important.
And Ezra is certainly correct about the public plan limits; the public plan can’t be that important, he says, because the various bills deliberately keep eligibility low to keep from raising CBO cost scores; there’s a limit on how many people will be allowed to choose the public plan in its first two years. But this argument is circular: this can’t be that important, because it’s not that big, because we made sure it couldn’t get that big to make sure it didn’t become that important.
I don’t know where to begin. I check Klein’s place every day, because he knows a great deal about the subject matter and sometimes does interesting interviews. But it is dismaying that someone who’s supposed to be an expert doesn’t make the logical connection between the horrors of the for-profit insurance industry and the obvious solution of creating an alternative that people could choose and that would force the industry to shape up, become more efficient or lose market share.
And if the private for-profit insurers can’t shape up, and can’t become a model of reform — and no one seriously expects they can — then we’re going to need something to replace that model, and we better start working on that now.
After all, if the current insurance-based system is extracting a growing, unsustainable amount of the nation’s GDP and bankurpting its citizens, and we enact "reforms" that require more people to use that flawed system, but do nothing to break its market stranglehold or give people and businesses another option, isn’t it fairly predictable that the problem will be worse in ten years, not better? Is there a more likely scenario than that?
A strong public plan that can force the private industry to mend it’s ways or replace it if that becomes necessary — and it will — is not the only element of reform. Krugman calls it one of the four pillars, and all are necessary.
And sure, regulation can outlaw the worst practices and maybe encourage efficiency, but if insurers evade the rules and/or remain bloated — and all the incentives to do so are still present — consumers/patients and providers should have another choice.
The public plan is central. It intersects with or lies at the heart of every goal the reform effort is trying to accomplish.