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John Aravosis at AmericaBlog discovers that the insurance industry’s think tank has promoted the talking point with GOP Congressmen that "OMG!! One hundred and twenty MILLION Americans will lose their private health care under Obama’s public plan!" Actually, though, their study determined that these Americans won’t LOSE their private health care.
120,000,000 Americans will DISCARD their private health care in favor of the public plan. This is the messy, terrifying outcome for insurance companies of a public plan: their customers will flee, and their own think tank knows it.
The Republicans, not surprisingly, are trying to scare Americans out of reforming the health care system. One "fact" they love to cite? That 120m Americans will lose their health care coverage if the Democrats are able to give Americans the same health care coverage that members of Congress have – i.e., a federal plan, or "public option," in which you get great benefits at a low cost.
But how would so many Americans "lose" their coverage if Barack Obama keeps saying you can keep your plan if you like it better than anything new on offer under the new regime?
They wouldn’t. They would FLEE their private plans. And the insurance industry knows it!
Not only is the "study" prepared by an insurance company’s own "think tank," but the study doesn’t say that 120 million Americans will lose their private health coverage if a public option is enacted into law. The study say that 120 million Americans will choose to leave their private insurance coverage and take the public plan instead, because it’s cheaper.
Since more than two-thirds of Americans want some kind of public option and the insurance industry’s own data shows that 120,000,000 Americans will choose a public plan, why are Democrats trying to "compromise" with GOP Senators — and their own Conservadems — to eliminate the public plan?
Barack Obama is right: America deserves a real public plan. Americans want it. Americans deserve it. And the insurance companies are terrified of it.
40 Comments
I think this is a stunning discovery.
The GOP talking point, parroted by Mike Pence and Paul Ryan, is a deliberate LIE. It’s a complete fabrication based on twisting a fundamental truth: Americans want a public plan.
tis that opposite speak – they say one thing when the facts say the opposite
I suppose their answer would be that saying that 120,000,000 Americans will “lose” their private health care is true in a strict sense: it will be lost to them, since they will stop paying the premiums and enroll in the public plan.
Of course, if your employer isn’t paying for you to be in a private plan anymore, you can also ask that employer to pay you what they were paying the insurance company! Now that’s a stimulus!~
teddy – do you really think americans want a public plan in competition with private insurance more than they want single payer (if they are informed on what each of those policy options are — and especially how much they cost)?
I think a public plan will get us to single payer within three years. Insurance companies can’t shed 120,000,000 customers and survive. Since we apparently can’t call it single-payer right out of the box (it was eliminated during the presidential campaign by all three of our front-runners, for reasons I don’t understand) the next best thing is a plan that will get America there soon.
can you please explain that process to me with an outline of the intermediate steps?
i’ve tried and tried (including asking lots of people – none of whom have ever given me more than talking points) to understand. maybe i’m too stupid or missing something obvious? because i just don’t see how we get to something like hr 676 with universal coverage (everybody in), no copays, deductibles etc. and funded via income taxes.
especially if this is true (from bill moyers):
bill moyers linky:
http://www.pbs.org/moyers/jour…..ript4.html
I would not be surprised, with all the chaff flying around, if a huge percentage of the folks who support a “public option” actually think THAT IS THE SAME Single-Payer.
i think you are exactly right. and without mentioning names, i’ve seen spokes people for the public plan / private insurance actually call it universal health care (hello? it not even universal health insurance) or call the public plan option single payer.
lots of chaff.
Like we haven’t seen this before – such a cloud of ideas (such as they are), and then a giant push to extrude the ‘business/industry-preferred plan’ as the only viable option. Think FISA/PAA, round Reyes.
Which is why I am nervous when Pelosi and Feinstein seem to be on the right side of something – more than likely, they embrace it in order to smother it.
good call. once bitten and all.
also, why all the effort that went into keeping single payer from being openly discussed as a legitimate policy option? maybe because it’s easier to confuse people if they aren’t well informed?
i have been strongly skeptical of the so-called public option because i just don’t see how it can in actual practice be protected from being co-opted by insurance industry written regulation. and that is why i fear it is a sop to the base to keep us in line while pandering to the insurance companies.
Makes me wonder how much spontaneity there was to the Baucus removal of Single-Payer advocates. I think they may be playing it by ear.
if that’s the case, then all the more reason to re-double efforts. yesterday’s message from pnhp:
Liberals take note: No battle is won until we see it surrendering in the rear-view mirror.
and
Keeping a win requires maintenance all day, every day.
We have never latched onto that one.
yes.
i didn’t get that before.
trying to now.
If 120,000,000 Americans choose the “public plan” while a few stay in their private plans, the insurance companies will go bankrupt. Frankly, nothing could get us to single-payer more quickly than that.
uh no. not even.
1. not if the insurance companies shed their sickest most expensive customers.
2. not if the public plan is under funded and the remaining private insurance polices were expensive boutique plans.
3. health insurance would still be financed via premium payment and health care via copays, etc in addition to insurance payments.
4. people who don’t pay the premium aren’t covered.
teddy, i hope you know i love you, but i think that’s just magical thinking. (although i sincerely hope i’m just being incredibly dense).
if the transition can work, then it ought to be possible to map out an outline of the major transition steps (how it’s financed, who’s covered, what’s covered) between a public plan / private insurance competition and something like hr 676.
i can’t do it, and i haven’t seen anyone else do it either. until i do, i’m not buying.
(please forgive, i’m not trying to be a pain in the ass – i really don’t see it and want to)
I agree in principle, although 120 million would, I suspect, be such a shock that Congress would have to do something and might well turn to single-payer as Teddy suggests.
The danger I see in this scenario is the initial sticker shock. As I understand it, the public option would preserve much if not all of the current insurance infrastructure. If you charge premiums, you have to process them and keep records of who pays. You have to issue insurance cards, track treatments, mess with deductibles and copays.
Contrary to what private insurance companies claim, this COSTS money–and it doesn’t come cheap. I’ve read that something like 30% of current healthcare costs go to this kind of overhead. It would not surprise me if it were more, given what I know of the efficiencies of large companies.
So transferring the inefficient private model into a public cousin saddles the latter with whopping great overhead.
Private insurers can then court the healthiest with prices that UNDERCUT the public plan, premiums that are CHEAPER, while still making a whopping great profit. They keep the healthy folks’ profit and pay nothing in claims, because, when someone gets sick, they boot him to the public plan. The public plan has to pay the care for the sickest out of the premiums paid by the sickest, so its cost exceeds income. The private plans are pure income (after overhead), because they never pay the costs of claims.
So mixing public and private options creates perverse incentives that work against normal, free-market principles. It short-circuits the normal insurance model, where premiums exceed claims and generate a solid if modest profit. With guaranteed losses, minimal income, and high overhead, the public option would look enormously expensive and would die in short order. The resulting crisis might bring in single payer if the enough people were involved. But it might not.
Single-payer can work differently from public option because it is universal: everyone pays into the system, whether through premiums or taxes. So the normal insurance model still applies: the healthy majority pays for the sick minority. Only now, the “profit” can be used to cover the poor and/or returned to the insured as lower prices.
Moreover, because it is a single-payer system, we no longer need to keep the high-overhead business practices that private insurance demands. If we skip premiums and simply fund coverage from general revenues, we needn’t keep track of who has paid. Since our business model no longer depends on denying care to individuals, we can largely dispense with tracking and approval of patient treatment. We simply pay provider bills in bulk (with consequent privacy benefits abd reduced overhead on the provider side). Fraud would not be a problem, because we would have the statistical base to detect unusual billing patterns.
So, if single-payer eliminated anything like 30% in overhead and perhaps the 20-30% profit that companies seem to expect these days, we are talking major cost savings even if we do NOTHING else. We could insure everyone in the country without changing anything else, and we might still save money.
i agree.
I don’t get it….. I was under the impression that a public plan would be similar to Medicare for All, a single payer plan.
I don’t get it…..
I would base the premiums on the Canadian system, it is a sliding scale using income. A friend in Canada has two kids in college earning less than 20K, they are except on premiums but their father pays the max, around $1000/year. They pay little out of pocket, DO NOT have wait times and have access to care from providers of their choice.
if 300million people paid 1000 a year
3,00,000,000,000,000…3 trillion dollars?
Which is more than we’re paying now … health care expenditures are about 15% of GDP. GDP in 2008 was $14.3 trillion, which would bring health care in around $2.3 trillion.
Let’s see … I’ve got a very good health care plan (BC/BS) through the U, and between the U and me, BC/BS gets about $5K a year to cover my wife and me. I won’t even get that greedy and ask for $3K back, I’ll settle for $2K and getting everyone covered.
Selise,
If 120M Americans leave their current insurer in favor of a public plan, the insurance companies are going to be hurting, badly. Boutique policies will not keep them in business. Their plans will be regulated at least to the point of offering reasonable coverage, and the coverage requirement will price them out of market for boutique coverage.
For public/private plans to coexist, there have to be rules against adverse selection written into the law. If you sign up with Fly-by-night Health Care, they can’t refuse. If you turn out to be an expensive client, they can’t dump you.
Insurance is a volume business. If the volume goes way down, they will find difficult to stay in the business, provided that they aren’t allowed to cherry-pick. The companies will have to be monitored so they don’t pull stunts like putting offices in inaccessible places, holding open enrollment at 1:00 AM, etc.
I think it’s manageable, and the health insurance lobby’s desperate fight against any government-run plan shows that they’re seriously concerned about it too. If they’re concerned about it, it’s probably a good thing.
BC, i have a ton of questions!
1) who is going to do the monitoring re cherry picking? no one seems willing to stand up to insurance companies.
2) is himmelstein wrong about other experiences with private / public plans?
3) even if the insurance companies are hurt, we’re still left with a gov provided insurance that only covers people who pay the premiums. aren’t we going to be left with tens of millions of uninsured? my comment about boutique private insurance was mean to describe that if the public plan is not very good coverage, then so long as private insurance can compete with very good even though expensive coverage where is the incentive to improve the public plan? (that’s why i want congress and all their staff to have to be on the public plan)
4) will the public plan be in the business of denying coverage, etc as private insurance now does?
that’s just a start (i’m tired and uncaffeinated), but after experience with MA reform i am not trusting (i’m one of the people who was helped by the reform, and i still HATE it. and i hate it even more when i see what is happening to those most in need who’ve seen funding for health services for the poor slashed to pay for the costs of the reform).
i really hope you will weigh in on the details of any public / private reform plan that is considered.
Probably State Insurance Commissions. Some do stand up to the insurance companies (notably Sebelius).
No. But remember that (if I’m remembering correctly) Himmelstein is talking specifically about the situation with Medicare. Again, this is a regulatory problem.
That’s why the public plan has to funded through payroll taxes and the general fund, and it has to be the default. You’re in it if you don’t do anything, even if you don’t enroll until something bad happens.
Okay, this is the toughie. Health care is a scarce commodity, but desirable when it’s needed. It’s going to be rationed somehow, but our current rationing system is insane. I don’t know how the new rationing system will work, but there will be one. The other thing that we can (and ought to do) is to get physicians and surgeons out of their current procedure-oriented practice. The more procedures a physician does, the more money she makes. It’s a perverse incentive, and it runs up costs for all of us.
An insurance mandate without universality provision isn’t much of a reform, selise. We have to make fundamental changes in our health care finance system.
If our current system was a computer program, we’d trash the code and start from a clean sheet.
Count on it.
i think it was uwe reinhardt (???) in a recent talk who said that there is no economic need to ration care now, based on what we are currently spending, but that if projections hold we will have to start rationing in a decade.
i have no idea if he’s right, but i guess i was thinking that my first goal is universal care with enough cost savings (by getting rid of private insurance companies) so that the total cost is constant (or at least not increased). then figure out, once everyone is in the same program and our incentives are aligned, how to ration or control costs further.
maybe that is stupid in addition to being overly simplistic?
for months i’ve been told things like i have to get behind obama’s plan or have no voice, even though there is no plan for me to evaluate. this has not been a process that i trust, especially with all the effort that has gone into keeping single payer proposals like hr 676 out of policy discussions (and worse, calling a hypothetical “public option” “single payer” or even universal healthcare when it may not even be universal insurance).
i’ve become really paranoid about getting a crappy reform and being told it’s wonderful.
amen. i bet docs would like this too – piece work sucks. and my very favorite regulations are the ones that create incentives for socially good behavior / public goods.
thank you, thank you, thank you. i really have no words to express how much i appreciate your analysis and perspective on these issues.
p.s. have you seen hr 193 that ralphbon and i were discussing above? i’ve gotten drsteveb’s permission to cross post his diary on it (i’ll do it tonight or tomorrow).
I’m mystified by the talk of “rationing.” What is this supposed to mean?
Consider public highways.
* They never go everywhere that each of us might occasionally want them to.
* The stretch that each of us drives each day always has more potholes than it should and more traffic than we’d like.
* Sometimes we may not be able to use a road that we’d like to when we’d like to, because of over crowding or flooding.
* None of us uses the road all the time.
Would anyone refer to the above as “road rationing”?
Of course not. We know about how much the roads get used and we agree on how much we are prepared to spend when addressing the use. Sometimes we underestimate, reject a bond issue, and get a voter-demanded correction. Sometimes we spend too much. But it works out. We decide.
The same would be true of healthcare.
So where does “rationing” come in? I think that the word is nothing more or less is than a variant on the usual Republican appeal to selfish fear and greed. It’s a code word like “unfair” in the context of progressive taxation or “welfare Cadillacs”. It is meant to get you up in arms because someone like you might be getting something that you are not–never mind that it is something you might not want (the taxes of someone richer or the income of someone poorer, for example). The Republicans wave this tired old red flag in our faces so that we don’t notice that they are systematically robbing us.
Well, here’s the old, tired dynamic. Right wingers accuse liberals, with all the demonizing disdain they can muster, of being…LIBERALS! Liberals, spooked, timidly respond, “No we’re not.” And so it goes. Even with Dems in the White House and both houses of Congress.
And here’s where the damage wreaked by capitulatory coalitions like HCAN stands out in sharpest relief. Right wingers cite the most pessimistic — ie, what I regard as the most optimistic — estimate of how Americans would react to a public option, claiming pessi[opti]mistically that the public option would function as a back-door route to [BOOO!!! SPOOKY!!!] single payer.
HCAN’s response: That’s a damn lie!:
Emphasis mine. “Always” is a long, long time, Mr. HCAN spokesmodel.
The genuine progressive response?
a. You say “single payer” like it’s a bad thing.
b. IF ONLY!!! The 120 million estimate, if even true, derives from a pure, universally accessible Medicare-like public option, akin to that detailed in the almost-never-mentioned legislation by Pete Stark, HR 193. Yes, it would beat the pants off the for-profit competition and grease the skids, perhaps irrevocably, toward single payer.
And as the computer Deep Thought, as it was about to start calculating the Ultimate Answer to Life, the Universe, and Everything, said to protesting philsophers threatening to go on strike:
ralphbon, i’m an idiot! i had no idea that hr 193 had been reintroduced this congress (and in january too boot!).
thanks for that link. here’s the thomas link, so we can keep track of cosponsors (there are now 3):
http://thomas.loc.gov/cgi-bin/…..1:H.R.193:
now that’s a public plan i might be able to support! why aren’t the hcan folks pushing it?
Because they consider it no more “feasible” than single payer, and they just loves them some feasible.
Choice…the Insurance companies are going to spend billions fighting this. The peasants need to keep applying pressure PRESSURE..THEY NEED TO KEEP HEARING FROM US
As for idiots, I’d never heard of HR 193 until DrSteveB blogged about it last week.
do you it it would be worthwhile to cross post that diary from drsteveb on hr 193? i’m sure he would say yes if we asked (actually i bet he’d say please).
p.s. i’d also love to ask BargainCountertenor for an opinion on it.
I think that would be a great idea. The other “orphan” legislation that I think deserves more attention is Bernie Sanders’s S. 898 five-state single-payer demonstration bill. (I think it was formerly called S.2031; don’t really know the difference.)
Meanwhile, I need to try to hold off further blogging today to put food on my family.
i will email drsteveb.
agree about bernie sanders’ demo bill (and thank you for telling bringing to my attention).
catch you later…
savvy.
I consider Rosen’s savviness thesis one of the most spot-on media analyses since Chomsky and Herman’s Manufacturing Consent. He discussed it previously in this interview with Glennzilla.
Gladstone, unfortunately, is pretty addicted to savviness and hipness herself, which is why I usually ignore NPR’s On the Media (as I do the rest of NPR) to no noticeable ill effect. Later in the Moyers interview, it’s hard to tell whether she’s really that bothered by letting Democrats and Republicans set the frame for acceptable/reportable debate.
wow. thanks for that link. i’d listened to it before, but just listened to it again and am now thinking about how single payer has been moved from the sphere of progressive consensus to the sphere of deviance – and who has done that. mind blowing.
The public plan will be open to all and will pay its bills. It will therefore attract the sickest customers and incur greater expenses than the private plans, which avoid sick patients and reject a lot of claims. Himmelstein and Wolfe explained how this works on Moyers’ Report a couple of weeks ago, and selise has the relevant comments at #7.
Here is a more abstract description from the Wikipedia:
The bottom line is that we need to keep for-profit insurers out of the primary-insurance market, the way that the rest of the developed world does: