By , M.D.
Asbury Park (N.J.) Press, November 5, 2019
Addition of a “public option” to our healthcare system has entered the presidential debates. Would it bring affordable care to all Americans?
Early drafts of the Affordable Care Act in 2009 included a public option. Under pressure from the insurance industry, however, it was removed from the final legislation. There has been no discussion of health care delivery in Congress since. But now, two well-crafted bills advocating Medicare for All (M4A) are pending in the legislature (S.1804; H.R.1384). The idea of a public option has been revived by candidates for the 2020 Democratic presidential nomination as well. As the national debate progresses, candidates seeking to position themselves as moderate will advocate for this option.
The idea of a public option is not complicated. In this scheme, the government would create a public financing system identical to Medicare. That system would be available to all as a choice. Proponents of a public option, Joe Biden, Pete Buttigieg and Kamala Harris, have differing ideas as to how this plan should be financed. Their goal, however, is the same: to create an option other than private insurance. People preferring to keep their current private insurance or those preferring to enroll in an inexpensive but non-comprehensive plan covering only catastrophic medical events could do so.
Proponents off a public option see this as an incremental step forward, one that would be more acceptable to the public than the immediate adoption of a single-payer system. Conceivably, this approach would eliminate opposition to health care reform from labor unions. Many unions see their health care plans as major achievements for their members and wish to maintain them. Free choice would satisfy others who resent being forced from their current private insurance to a universal public plan. The existence of a public option would drive the insurance companies to compete by limiting their premiums and improving coverage. Were the public option to be successful, proponents believe it would evolve to a single-payer system.
Medicare for All advocates see otherwise. For them, a public option would increase premiums for those with major illnesses. How? Private insurers would siphon away healthier persons from the general insurance pool by offering inexpensive but non-comprehensive plans, plans designed to appeal to those with few medical needs. The pool of patients left to choose the public option would be those with the greatest medical needs, thus increasing cost.
This scenario already plays out with the heavily advertised Medicare Advantage plans. Those plans now recruit healthier members by offering free gym memberships or sneakers as joining bonuses while removing other members with chronic illnesses from their rosters or denying their claims. When members become ill they often are transferred to the public plan. To this end, a recent Asbury Park Press article reported that prices on the New Jersey exchanges would likely increase as much as 16% in 2020.
Public option opponents also point out that multiple payer systems will perpetuate exorbitant administrative costs. In 2018, for example, Canada’s single-payer system spent $196 per person in administrative costs; in the U.S. it was $919. Here is one small example. The simple task of yearly re-credentialing requires multiple full-time administrators here because each entity, i.e., insurance plan or regulatory board, has it own format for reporting the necessary information. This creates duplicative, useless work. Perhaps most important, a single-payer system, unlike multiple-payer systems, has power to negotiate volume discounts with the pharmaceutical and medical equipment industries, thus reducing prices 30% to 40% for those items.
Since the healthcare debates during the Obama administration, public interest in the issue has grown. In 2009, the industry saw a public option as threatening and vigorously opposed it. Now, however, industry strongly supports a public option as a means to continue to reap profit.
Six candidates in the recent Democratic presidential debates (Cory Booker, Tulsi Gabbard, Bernie Sanders, Tom Steyer, Elizabeth Warren and Andrew Yang) support Medicare for All. They all reject corporate campaign funding. By contrast, candidates supportive of a public option have accepted campaign contributions from corporate donors.
Note also that organizations supportive of a public option, e.g., hospital corporations and the insurance industry, profit from the current health care system. By contrast, organizations supporting Medicare for All (e.g., the League of Women Voters, National Nurses United) are patient care advocates with no financial interest. It appears that one motivation of public option supporters is to preserve corporate profit.
My choice? Medicare for All. No doubt. We can minimize cost and maximize efficiency only with a single-payer system. Achieving public acceptance for it will be an uphill slog, however. My hope? in 2021, we will have support for genuine health care reform in both executive and legislative branches of government. We will then have a transparent debate, this time with Medicare for All advocates the table.
Dr. Marc H. Lavietes, of Bradley Beach, is secretary of the New York Metro chapter of Physicians for a National Health Program.