| There's been some talk that the public option isn't worth fighting for. Ezra Klein, for example, has been saying for months that the public option isn't all that important to reform. Steven Pearlstein yesterday went further, and called the public option essentially a meaningless "political litmus test."
Are we just foolish?
Not at all. What Klein and Pearlstein both ignore or miss is that what is at the heart of Joe Scarborough's silence when Rep. Anthony Wiener asks, "what value does private insurance bring to health care?" It's not just about cost. Those of us who have been burnt by our insurers at one time or another (all of us?) mainly want an insurer we can trust to come through for us when we are at our greatest need.
Krugman:
...to have a workable system without the public option, you need to have effective regulation of the insurers. Given the realities of our money-dominated politics, you really have to worry whether that can be done - which is a reason to havea more or less automatic mechanism for disciplining the industry.
And most of the reforms that many value so highly, put at the center of this particular reform effort - the community standard, the health insurance exchange, end of discrimination against preexisting conditions, etc & co - overlook the fact that these are patches or band-aids, not cures. What's inevitable is that the insurers will again find the loopholes to increase profits by denying claims. And why would a health insurance exchange without a public option result in lower prices, instead of an opportunity for insurer collusion?
I'm no economist, but it seems to me the benefit of the market is that competition spurs efficiency in production (cheaper prices) and better products. But the chase for profit also results in efficiencies that are not beneficial to the consumer or to the community -- outsourcing production to countries with slave labor, say, or using cheap materials or production techniques that are endanger human health and the environment. Regulation is our mechanism to try to direct the market to avoid negative efficiencies.
Insurance is a funny product, though. There's no production, so you can't really use technology to make it cheaper...and the efficiencies that would make a better product are difficult to implement, result in minimal gains, and are long-term, slow-growth changes - emphasizing preventative care, say, or streamlining bureaucracy. On the other hand, the efficiencies that are bad for the consumer are easy and result is big gains: denying claims, raising prices. Investing funds in health care delivery, so they make money from rising costs even as they pay out higher claims. And they can do this relatively easily, because insurance is a necessity. Consumers are essentially captive. And it seems to me that the the insurers' product will continue to degrade in quality and increase in cost until just short of the point at which the risk and cost for the consumer is just as bad as having no insurance at all.
A community standard, a health insurance exchange, subsidies to the insurance industry -- I can't help but think of them as temporary obstacles to the downward spiraling quality of private health insurance...
And, for me, that's where the public option steps in. It's a crucial brake on this degradation. A government-run insurance program wouldn't have the same incentives for negative efficiencies. Because there's no profit incentive, a public option wouldn't deny claims or raise prices (except to cover costs). And the worse private insurance gets, the more people would jump to the public option. On the other hand, I suspect that without incentive for profit, a government-run health insurance wouldn't seek positive efficiencies, either. It'd have to be pushed by administrators. And that's where private insurance can excel.
A public option then, should serve as a brake on private insurers' negative practices and an incentive for private insurers to better their product by prodding consumers into better health choices and health care providers to practice preventative medicine and eschew unnecessary procedures.
Or something... |
