Liberal, Irreverent

Thursday, December 25, 2008

From: Campaign for America's Future (

The Key to National Health Care: The Public Plan Choice

Last week, President-Elect Barack Obama promised to act quickly and boldly “to modernize our health care system for the twenty-first century; to reduce costs for families and businesses; and to finally provide affordable, accessible health care for every American.”

The health insurance industry is worried. And they have begun to attack the key feature of Obama's health plan—his proposal that Americans should be able to choose a public insurance plan (like Medicare) in addition to a variety of private insurance plans. This idea of "public plan choice" has been endorsed by Obama, by Senate Finance Committee Chairman Max Baucus, and by Congressman Pete Stark and over 160 other Members of the new Congress. Sources...

Opponents of health care reform want to limit our options to the same health insurance companies that got us into the current mess. We can’t let that happen.

* A new report by Jacob Hacker, entitled The Case for Public Plan Choice in National Health Reform was released on December 17 by the Institute for America ’s Future and the Center for Health, Economic, and Family Security. The report shows why forcing the insurance companies to compete with a public option is vital to (1) control costs, (2) improve quality, and (3) set a high standard for private plans. To see the full report, click here.

* A Medicare-style public insurance plan is better able to contain health care costs than private insurance. Between 1997 and 2006, health spending per enrollee grew faster under private health insurance than under Medicare. Public insurance has lower overhead. For example, Medicare’s administrative costs (in the range of 3 percent) are well below the overhead costs of large companies that self-insure (5 to 10 percent of premiums), companies in the small group market (25 to 27 percent of premiums), and individual insurance (40 percent of premiums). And public insurance can use its purchasing power to reduce costs. In 2006, for example, Medicare physician payments were significantly lower than rates paid by private insurers, yet 97 percent of physicians are accepting some new public Medicare patients. Sources...

* Public insurance has pioneered quality-improvement methods that have frequently set the standard for private plans. The Veterans Health Administration (VHA) created a model evidence-based quality-improvement program that significantly increases the percentage of patients who receive the care they need. Elderly Americans with public Medicare report that they have greater access to physicians for routine care and in cases of injury or illness than do the privately insured. They are also half as likely as nonelderly Americans with private insurance to report common access problems, such as skipping a medical test, treatment, or follow up, and failing to see a doctor when sick. Sources...

* A public plan option will set a high standard against which private plans must compete. Transparency in Medicare has helped to identify areas where higher health spending has not increased quality. In contrast, 126 private plans refused to provide data to a national accrediting agency that was needed for the magazine to rank plan performance. Driven by profit, private insurance companies seek to avoid insuring those with chronic and costly disease, yet they are the ones most in need of innovations in treatment and care coordination. A public plan, which by nature will take all comers, is best able to treat them and disseminate the lessons learned. Sources...

Progressive Solutions

Get ready for a fierce fight. The insurance companies and the drug companies will spend hundreds of millions seeking to eliminate or weaken a public plan option in health care reform. They are looking for a plan that will provide more money to their coffers, not more competition for them to meet.

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