The Public Option Vampire
Some bad ideas, no matter how firmly they are rejected, just refuse to go away. Like Dracula, they continue to rise from the dead. The so-called public option for health insurance is one such ill-conceived concept that keeps clinging to life.
Here’s the latest. The Congressional Budget Office was requested to analyze a proposal in which a government-run health plan would be added to the health insurance exchanges that will be created under the new health reform law, the Patient Protection and Affordable Care Act. CBO came back with a finding that doing so would reduce federal deficits through 2019 by about $53 billion — $37 billion through reduced subsidies to exchange participants because they would be selecting the lower-priced government plan and $26 billion in increased tax revenues because a greater share of employee compensation would be in the form of wages and salaries instead of non-taxable health benefits.
Noam Levey, the excellent health policy reporter for the Los Angeles Times, wrote this week that, with the CBO report in hand, 128 members of the House of Representatives are pushing to reconsider the public option idea that was cast aside during the health reform debate. The rallying cry for resurrecting the public option is now deficit reduction.
No matter what rationale is used, though, for advocating a public option, the fatal flaw in the argument remains the same.
A government-run health plan does not save money through some mystical efficiencies that private plans can’t find. It simply pays physicians and hospitals less money. Medicare and Medicaid pay providers less than the actual cost of providing care. They make up that shortfall by shifting costs over to private payers, thus increasing healthcare costs for employers and individual health insurance purchasers.
CBO estimates 13 million people would opt for the government-run health insurance plan. Public option advocates say the end result will be lower deficits and reduced consumer costs. But they know better. It’s not a reduced cost burden. It’s a transference of that burden to private payers.
CBO’s report doesn’t change the fact that the public option is just as bad an idea now as it was during the health reform debate. Can we please just put a stake in this thing?
