Column: A public plan to fail

-A A +A
By Lee Einer

Our country is embroiled, on a federal level, with the health care reform debate. One of the opening salvos came in the form of President Obama declaring that any talk of single-payer health coverage is “off the table.” Oddly, nobody has questioned how single payer got “off the table.” I am guessing it didn’t jump off the table of its own accord. I would lay serious money on the likelihood that the health insurance lobby leaned on Obama and others to push it off the table.

My suspicions in that respect are in part fueled by the fact that Max Baucus, the senator tasked with heading the Senate’s committee on health-care reform, receives more money from insurance companies than any other member of Congress.

Baucus has accepted nearly $4 million in donations from insurance companies, big pharma and other health industry insiders during his career. Is he bought? I’ll leave that conclusion to you, dear reader.

Incredibly, it seems that most simply swallowed Obama’s “off the table” statement hook, line and sinker, and moved on to cheerleading for some sort of a “Public Plan” to operate alongside of all of the existing private plans as well as the other various governmental plans.

This would go along with a proposal to require Americans to purchase health insurance if they are not already insured. That purchase would be subsidized by tax dollars for those individuals and/or families on an income-based sliding scale.

It’s really not a great idea.

Let’s talk about the flaws in the public plan scenario.

In order for a public plan to work, you have to also have laws in place, and rigorously enforced, compelling insurers to accept anyone irrespective of their health status or related demographics such as age. If you do not, then private insurers will cherry-pick healthy customers and leave the sick and the high risk customers for the public plan. The inevitable result will be that the private insurers will be making out like bandits while the public plan gets soaked, financially, paying for the medical care for America’s sickest patients.

We already have public plans working alongside private plans in the arena of Medicare and Medicaid. In these arenas, it is already illegal for insurers to discourage potential enrollees based on health status or related demographics. How is that working out? Amerigroup was sued back in 2006 for discouraging pregnant women from enrolling in their Medicaid plan. They settled last year for $225 million with no admission of guilt, shortly after announcing that they had landed a contract with Medicaid of New Mexico.

The public plan option also fails miserably at the task of administrative simplification.

Health providers labor under an enormous burden in attempting to navigate the reimbursement labyrinth which we have created in this country. It’s time consuming, labor intensive, and consequently expensive for medical providers to chase the money from the hundreds of insurance companies they must deal with, and that is one big but rarely discussed reason why single-payer health care would be a boon to the medical community. The reduction in paperwork and administrative overhead alone could go a long ways toward making single-payer health care financially viable. Of course, a “public option” does not simplify reimbursement, it will just add another layer of complication.

The greatest flaw of the public plan option, though, is simply this: Besides being an ineffective  bandaid on the status quo, it ultimately will serve  protect and perpetuate the status quo. If it is enacted, those seeking meaningful reform will be told to wait until 2013 when it kicks in. Come 2013, we will be told to give it a few years and see how it works. And a decade of inaction will fly by before you know it.

Kathleen Sebelius, the Obama administration’s secretary of Health and Human Services, has publicly admitted that the public plan option is in part a strategy to pre-empt single-payer health reform. National Public Radio’s summary of their June 16 interview with Sebelius said the following:

“Asked if the administration’s program will be drafted specifically to prevent it from evolving into a single-payer plan, Sebelius says: ‘I think that’s very much the case, and again, if you want anybody to convince people of that, talk to the single-payer proponents who are furious that the single-payer idea is not part of the discussion.’”

If you’re looking to the folks in Washington D.C., to fix this country’s health coverage crisis, it’s looking like you are in for a letdown, at least during this administration. But all is not lost — we the people have at least a little more influence at the state level, and there is a fine health reform plan called the Health Security Act for New Mexicans. The HSA  would establish universal coverage in this state. If passed, it may well be the model for health-care reform at the federal level, at such time as our elected representatives are ready to stop listening to insurance companies and start listening to their constituents.

Lee Einer is features editor at the Optic who worked in the health insurance industry for two decades. He may be reached at 505-425-6796.