The “Skinny” on the Healthcare Public Plan Option

As we discuss the healthcare reform efforts, looking on both sides of the debate, I attempt to bring some light to the various proposals being circulated. In my professional capacity, I am non-partisan. First and foremost are the clients I serve…from the single mother who needs help with Medicaid to the large corporation looking to streamline their healthcare costs.

It’s difficult to predict which solution will do the most good. Everyone from insurance company execs to the person on the street knows that our system needs fixing. The question then becomes, what is the most cost-effective way that will impact the most people in a positive way? The key to understanding this is information. The last couple of columns I’ve talked about one of the most polarizing solutions being floated about: the public (government) plan “option.” I’ll talk again about this issue because this one item alone may make or break any reform effort.

Much has been said about “single-payer” healthcare systems such as those found in Europe. However, we as Americans have continually forged our own way, leading not only in standard of living compared to other countries, but having less taxes than other industrialized nations. All of this is possible because of our free-market system where (successful) innovation is rewarded. Is it any wonder, then that since 1970, thirty Nobel Peace Prizes in medicine went to Americans in whole or in part? Just this last year, in 2008, of the top ten medical stories, nine of them were actual medical advances; Americans were responsible in whole or in part for eight out of the nine. A government plan goes against the very principles our great country was formed to promote. It was Thomas Jefferson who said, “A government big enough to give you everything you want, is big enough to take away everything you have.” We only need to look at other government programs like Medicare (which is slated to be bankrupt in 2017) to realize how government plans are underfunded.

Nothing illustrates the power of information like a real-life example. I recently had a conversation with my barista at a well-known coffee shop. He knows I’m involved with the healthcare reform efforts and knew I was in Washington, D.C. recently. “How’d it go?” he asked.

“Great,” I replied. “I met with some senators to show them the pitfalls of a public plan option.”

“What pitfalls? From what I hear, we would still have the option of keeping our private coverage. I think it’s a good idea myself.” he commented.  The conversation continued.

“A public plan won’t stop there, and not because of some government conspiracy. It’s a question of simple economics; public plans like Medicare, for example, pay a flat rate to physicians whereas private companies negotiate their rates. Physicians will negotiate higher reimbursement rates with the insurance companies to make up for the shortfall in income from taking the lower paying public plan, which causes rates to rise, which causes private insureds to jump onto the public plan. Even if a public plan could pay market rates to physicians (as of the date of this writing, one proposal actually calls for the government plan to negotiate rates—it’s important to note that Medicaid started out this way and then went to a flat-rate system), because a public plan wouldn’t pay premium taxes (currently $70 million a year in my state alone), private plans are at a greater competitive disadvantage.”

“So what if the insurance companies go out of business and we have nationalized healthcare? I think that’s a good thing. Look at Canada,” he replied.

I complied. “Are you aware that the average wait time to see a primary care doctor in Canada is over 3 months? In some places in Canada, lotteries are held to see who can ‘win’ a trip to the doctor. Ontario sent 160 patients to New York for emergency neurological surgeries between 2006 and 2008.” He started fidgeting. I then asked him to take a look at another government-run program, the Veterans Administration.

He brightened. “I’m glad you brought that up! I have a friend who’s been in the hospital for the last two years who worked for the VA. He almost died, but gets the best treatment ever!”

“Hmmm, “ I said, “that doesn’t seem right.”

“Well, there’s his wife, right there. Go ask her,” he smiled. I did just that.

“Oh, he’s covered by a Blue Cross group plan that they have for their employees. He’s finally coming home tomorrow,” was her response. I saw the dawn of reason in the barista’s eyes.

There are many more technical reasons a public plan would jeopardize our way of life, but due to space limitations, I can’t go into them here. However, with information and education, shortcomings of programs that appear to be solutions will be exposed. That’s why any healthcare proposal needs to withstand scrutiny by all parties.

Until next time stay healthy!