Wednesday, July 1, 2009
Health Confused About the Public Plan vs. Co-ops?
Posted by Eli Sanders on Wed, Jul 1, 2009 at 1:39 PM
And I don't mean intentionally confused, as our state's junior Senator seems to be.
Still, it's true, parsing all the competing health care reform proposals can be super perplexing. I've tried my hand at explaining, but who better to make it all very simple and enjoyable than a local expert in simple deliciousness? Over at the Cupcake Royale blog, owner Jody Hall walks you through the public option, the co-op compromise, and why one is better than the other. Well worth a click.
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1
I actually didn't think that article explained anything at all. "Co-op Option is bad because it will cost more money and won't drive down private health care costs." That would be a convincing argument if they took the time to explain why that was the case, but instead we get more of the same.
"Regional co-ops and state-managed public plans will never have the financial stability or national muscle to compete with private insurance. They'll still be funded by your tax dollars, but they will not lower health care costs on any significant scale."
Why not? Why won't they be stable enough? Wouldn't people have more control over a local option? Won't there be less chance of being steamrolled and ignored by the federal government? We're going to be paying taxes for this anyway, why not keep it regional? I just don't understand...
"Regional co-ops and state-managed public plans will never have the financial stability or national muscle to compete with private insurance. They'll still be funded by your tax dollars, but they will not lower health care costs on any significant scale."
Why not? Why won't they be stable enough? Wouldn't people have more control over a local option? Won't there be less chance of being steamrolled and ignored by the federal government? We're going to be paying taxes for this anyway, why not keep it regional? I just don't understand...
2
That link really isn't helpful at all.
It's basically a lot of nonsense to say that coops won't work; it depends on HOW THEY ARE CHARTERED by statute. A national or regional coop can offer all the advantages of a Medicare/Medicaid-style public insurance scheme while giving moderate Democrats some cover so they can claim they didn't vote for a "fully public option."
No insurance scheme can work unless all Americans are paying into the system; that will happen either way. No insurance scheme can work unless Congress sets minimum coverage requirements and prohibits dropping policy holders and all the other common-sense requirements our current system lacks.
It's not about coops/public option; the debate is really about the rigor with which Congress implements the plan.
It's basically a lot of nonsense to say that coops won't work; it depends on HOW THEY ARE CHARTERED by statute. A national or regional coop can offer all the advantages of a Medicare/Medicaid-style public insurance scheme while giving moderate Democrats some cover so they can claim they didn't vote for a "fully public option."
No insurance scheme can work unless all Americans are paying into the system; that will happen either way. No insurance scheme can work unless Congress sets minimum coverage requirements and prohibits dropping policy holders and all the other common-sense requirements our current system lacks.
It's not about coops/public option; the debate is really about the rigor with which Congress implements the plan.
3
I agree that the linked article doesn't explain in anywhere near enough depth. The only thing it really covers is the basic idea that a national public option has the clout to negotiate pricing with providers to a degree that state and regional plans could never match. This is fairly obvious.
Years ago I worked as a third party administrator for a multi-state drug store chain. I was the person who tried to answer questions from pharmacists about insurance coverage for the 400+ plans that were accepted by the pharmacy in eleven states. Part of the reason that the market place is broken is the shear complexity of the system, every health care provider has to be on top of the various rates of pay, copay, deductible and especially formulary of covered drugs and procedures. Administering so many plans is costly on it's own, but the insurance companies take advantage of that complexity to deny payment on tests and treatments that should be covered, banking on the fact that fighting them is more trouble than it's worth.
State plans were always the most difficult. Their computer systems were not up to date, their rules were far more complex than necessary, and the time it took for them to responding to a claim was extremely long. I know that our state-administered SCHIP plan is not accepted by most pediatricians because it takes so long to receive payment. A regional co-op or state-managed plan would have the same kind of problems, thus not offering strong enough competition to private insurance companies to force them to improve their services.
Years ago I worked as a third party administrator for a multi-state drug store chain. I was the person who tried to answer questions from pharmacists about insurance coverage for the 400+ plans that were accepted by the pharmacy in eleven states. Part of the reason that the market place is broken is the shear complexity of the system, every health care provider has to be on top of the various rates of pay, copay, deductible and especially formulary of covered drugs and procedures. Administering so many plans is costly on it's own, but the insurance companies take advantage of that complexity to deny payment on tests and treatments that should be covered, banking on the fact that fighting them is more trouble than it's worth.
State plans were always the most difficult. Their computer systems were not up to date, their rules were far more complex than necessary, and the time it took for them to responding to a claim was extremely long. I know that our state-administered SCHIP plan is not accepted by most pediatricians because it takes so long to receive payment. A regional co-op or state-managed plan would have the same kind of problems, thus not offering strong enough competition to private insurance companies to force them to improve their services.
8
NY Times has a must-read for anyone trying to keep up with progress on this issue:
http://www.nytimes.com/2009/06/28/busine…
Current proposals are basically rewriting the Constitution to add government-funded health care as a basic right, without actually doing so. As it notes:
"An important question about any public provider of health insurance is whether it would have access to taxpayer funds. If not, the public plan would have to stand on its own financially, as private plans do, covering all expenses with premiums from those who signed up for it.
But if such a plan were desirable and feasible, nothing would stop someone from setting it up right now. In essence, a public plan without taxpayer support would be yet another nonprofit company offering health insurance."
http://www.nytimes.com/2009/06/28/busine…
Current proposals are basically rewriting the Constitution to add government-funded health care as a basic right, without actually doing so. As it notes:
"An important question about any public provider of health insurance is whether it would have access to taxpayer funds. If not, the public plan would have to stand on its own financially, as private plans do, covering all expenses with premiums from those who signed up for it.
But if such a plan were desirable and feasible, nothing would stop someone from setting it up right now. In essence, a public plan without taxpayer support would be yet another nonprofit company offering health insurance."
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