Midlands Voices: Real reform calls for public option

Dr. Frey is a professor and Roland L. Kleeberger Endowed Chair in the Department of Family Medicine at the Creighton University School of Medicine. Dr. O’Brien is a university professor and member of the Center for Health Policy and Ethics at Creighton. Their opinions do not represent Creighton University.

Over the past several weeks, Nebraskans have listened to a steady drumbeat of opinions in Midlands Voices essays written by advocates and apologists for the private insurance industry.

Their message? Don’t be hasty, America. It’s really not that bad. There aren’t really that many of us who don’t have insurance, and the rest of us are perfectly fine. What’s the hurry? Things will be OK.

And whatever we do, America, let’s not create a public insurance plan that will add to Americans’ choices.

Nebraskans should easily see through this rhetoric. And they know that millions of hard-working Americans teeter on the brink of losing their health care coverage.

Nebraskans understand exactly what the rest of America knows: Just because you have a job doesn’t mean you’ll be offered insurance. Just because your employer offers insurance doesn’t mean that you can afford it. Just because you can afford it doesn’t mean it will pay for much. And just because you’re able to get it doesn’t mean you’ll be able to keep it.

And good luck if you have an existing health condition. You aren’t likely to be able to get coverage for it or pay the exorbitant premiums that will be charged.

Being insured isn’t adequate protection, either. A recent American Journal of Medicine report showed that a shocking 800,000 individual bankruptcies occur every year in this country due to health care costs. Incredibly, 78 percent of these families had health insurance. But when they needed it most, it failed them.

And, according to the National Institute of Medicine, more than 18,000 Americans die each year as a result of a lack of insurance coverage.

An intriguing allegation was presented recently in a July 3 Midlands Voices essay. A public plan, it was alleged, “would attract the young and healthy and leave the sick and elderly to the private sector,” would be supported with “taxpayer subsidies” and “would use as its blueprint the cost-shifting techniques invented by Medicare.”

To the contrary, most medical economists predict exactly the opposite — that private companies would gobble up the healthiest patients and leave the sickest patients to the public plan.

In addition, supporters of a public plan have proposed means to ensure fair competition. Their public option would operate under the same rules as private insurers with respect to benefits and reserve requirements. It would be funded only by premiums, receive no government subsidy, negotiate fees with providers who would be free to accept or reject them and be operated by a different agency than the one that establishes rules for coverage or insurers. Sounds fair to us!

Who’s right? History provides the answer. A decade ago, private companies entered the Medicare market with so-called Medicare Advantaged plans, competing with traditional Medicare.

The outcome? The healthiest Medicare patients enroll in private plans, leaving the sickest patients to traditional Medicare. And all of this occurs despite the fact that private companies are paid an additional 13 percent premium by American taxpayers over standard Medicare.

Anyone who doubts the ability or the willingness of some private companies to manipulate markets should read the Senate testimony of former Cigna executive Wendell Potter. He described how his company sought to “purge” high-risk patients from its enrollees and jack up rates for small businesses that had employees with sick family members, in hopes of forcing those businesses to drop Cigna coverage.

To be sure, not all private insurance plans are guilty of using such tactics. Many engage in fair practices. These companies should have nothing to fear from a public plan. If a company’s insurance products are as superior as it claims, it not only will compete effectively against a public plan but also will soon end up with the lion’s share of business.

However, it’s also possible that some companies won’t be willing to give up huge profits and executive perks in order to compete, in which case only the most efficient and customer-oriented plans will survive.

This is as it should be. The American people — too long shackled with a system that includes skyrocketing costs, inadequate coverage and economically strapped employers — deserve something better. They deserve to have a choice, the option of a public plan.

The real winner in all of this, of course, will be the American people.

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