As readers of this blog know, I’m a supporter of the concept of a public health plan to compete with private insurers as a means of controlling costs through a provider fee schedule somewhere between Medicare and much higher commercial rates.
But there are valid arguments against this approach. In a paper titled, The Public Plan: Not Worth the Risks, Jeff Goldsmith of Health Futures Inc., argues that “an attractive alternative is to leverage the two public plans we already have,” i.e., Children’s Health Insurance Program (which has already been expanded) and Medicare (which he says could cover nearly 11 million uninsured baby boomers if eligibility was extended to age 55, with subsidies for low-income boomers.
Goldsmith also advocates reforming the insurance distribution chain through a “sophisticated, user-friendly, Web-based health insurance exchange…Let businesses and individuals sign up directly for coverage, and bypass the costly intermediaries who take a surprisingly large chunk of the health premium dollar.”
But mostly he warns against the damage a public plan would inflict on private health insurers by stealing away lucrative membership–a variation of the “a public plan would be too successful” argument.
“If we want to consider seriously a single-payer option, which would involve deliberately sunsetting the private health insurance industry, let’s have that discussion up front and see where it leads. To back into a single-payer system by inadvertently blowing up the private insurance system would be irresponsible, with the potential for significant collateral damage to the health care delivery system along the way.”
The problem is nobody wants to have that discussion in a serious way. The solution has to be a public-private partnership to have any political legs. A public plan still sounds like a good way to make reform financially realistic, while still leaving room for a smaller–but still viable–private health insurance industry.