CMA Health Policy Blog

Fiscally Conservative? Support A Public Option!

October 5, 2009 at 8:14 pm Judith Stein 1 comment

In the Senate Finance Committee, Arkansas Senator Blanche Lincoln voted against including a public option in health care reform.   She explains that her opposition to a public option rests with her knowledge that Arkansas voters are “fiscally responsible”.   We hope she will yet realize that anyone whose real concern is fiscal responsibility will support a public plan option. 

No matter how much one might want to believe that the private market is always a more cost-effective model than a public program …  it just ain’t so.  Medicare proves the point. 

• When Medicare private plans were paid 95% of what it costs to provide the same coverage in the public program, they left the program in droves. They couldn’t make enough profit.  (“Medicare+Choice,” enacted in 1997.)
• Under the “Medicare Advantage” program, passed in 2003, private Medicare plans are paid about 14% more than the same coverage would cost in the traditional public Medicare program.  And, not surprisingly, private insurance plans have flocked  back into the system.  The insurance industry is making a windfall from this system – at the expense of all Medicare beneficiaries, including the vast majority of beneficiaries who still choose “regular Medicare.”  Taxpayers overpay too. 
• The private Medicare plan program is bleeding the Medicare trust fund, reducing Medicare’s solvency by about 8 years.

If the Congress passes a requirement that all Americans have health insurance, but does not provide for a public option, we will have been taken to the cleaners yet again.  Private insurance will gain tens of millions of new customers and we taxpayers will all pay a much higher bill than is necessary.  Medicare’s experience proves this. 

Come on, Senator Lincoln, be fiscally responsible – support a public option in health care reform!

Entry filed under: Health Care Reform, Medicare, Public vs. Private Health Coverage. Tags: Health Care Reform, Public plan.