Bait and Switch on Public Option?

by: Ian Welsh

Sat Jul 25, 2009 at 20:30


The most devastating critique I've read of the current public option comes from Kip Sullivan. What makes it devastating is that although he's a single payer advocate, instead of attacking it from the point of view of single payer, he takes it on on its own terms—comparing the House bill's version of the public option to the one originally proposed by Hacker:

• The PO had to be pre-populated with tens of millions of people, that is, it had to begin like Medicare did representing a large pool of people the day it commenced operations (Hacker proposed shifting all or most uninsured people as well as Medicaid and SCHIP enrollees into his public program);
• Subsidies to individuals to buy insurance would be substantial, and only PO enrollees could get subsidies (people who chose to buy insurance from insurance companies could not get subsidies);
• The PO and its subsidies had to be available to all nonelderly Americans (not just the uninsured and employees of small employers);
• The PO had to be given authority to use Medicare’s provider reimbursement rates; and
• The insurance industry had to be required to offer the same minimum level of benefits the PO had to offer.
Ian Welsh :: Bait and Switch on Public Option?

What would this mean in effect?  123 million people enrolled, the ability to set premiums substantially below those of private insurers and the ability pay hospitals and doctors less than private insurers, leading to massive cost savings.

But of the five conditions, only  one is met in the new plan: requiring the insurance industry to offer the same plan.  Not a single other requirement of the original public option plan is met.  Not one.  As Sullivan points out, the public plan starts without a single enrollee and has to hire sales staff, negotiate contracts and so on, all while being required to pay back its start up costs within 10 years.  

What advantage do you have over the private insurers that means you will be able to out compete them?  The only one I can think of is that you don't have to make a profit, but that's only half true, because of the requirement to pay back within 10 years, you effectively do have to turn a profit.

Go read the entire thing.  Sullivans' argument is, in my opinion, strong enough as to be devastating.  I'll be discussing this more next week, as promised, but Sullivan has said most of what I wanted to say and said it better than I would have. His argument about why the CBO scoring of only 9 million enrollees is either correct, or even overstates the case is of particular interest.

 

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Bait and Switch on Public Option? | 40 comments
thanks ian (4.00 / 3)
imo, a very important article that needs to be discussed and am very glad to have your take on it.

p.s. although the article was posted by coates, it was written by kip sullivan.

Actually it's by Kip Sullivan, (4.00 / 5)
and some of us have been flogging it in the quick hits all week.  Glad you came around to take note of it.

But it's exactly right.  In the world of ordinary folks, like a lot of my family whom I just spent the day sitting around a pool and eating barbeque with, all well educated professional types this branch of the family, all they know is what Obama promised.  Health care for everybody.

The few who recognize the term "public option" think it means what Howard Dean is still saying...


Dean told Democracy Now's Amy Goodman last week that Obama's public option plan is best thought of as Medicare or single payer.

"For the average American, they should best think of it as Medicare," Dean said.

According to Dean, under the Obama plan, the American people will have a choice to opt into a single payer system.

"Look, you decide for yourself," Dean said. "We're going to allow people under sixty-five to sign up for what people over sixty-five have. And you make the choice."

Dean said that the Obama plan will give Americans the choice "between whether they would like a single payer for themselves and their families or whether they would not."

One problem: Obama's plan is not single payer.

Another problem: It's not like Medicare.

"He's a liar," (Dr. David) Himmelstein says.

This from single payer action and Howard Dean's Democracy Now interview last week.

It's pretty open now to those who are really paying attention.  The White House and his team in Congress are lying to us about what is in their bill, and some progressives in the blogosphere, for whatever reason are in on it.  These folks are spending a lot more effort deceiving the American public and censoring, excluding and beating down any discussion of single payer than they are fighting Republicans and the blue dogs whom they have so empowered.  

Add to this tidbits like this from Robert Reich who said last week that


Big Pharma, for example, is in line to get just what it wants. The Senate health panel's bill protects biotech companies from generic competition for 12 years after their drugs go to market, which is guaranteed to keep prices sky high. Meanwhile, legislation expected from the Senate Finance committee won't allow cheaper drugs to be imported from Canada and won't give the federal government the right to negotiate Medicare drug prices directly with pharmaceutical companies.

and you get a picture totally different than what even civilians who think they are paying attention to this are getting.

Last week JH at FDL called advocacy for single payer "kabuki".  But the real kabuki is Obama and co pretending to fight the blue dogs and Repubs with one hand, while using the other hand and both feet to throttle what many of his own people want --- single payer.  A nicely coordinated act, if he can get away with it.

Another tell, if you need it, is Obama and OFA's reluctance to call on those 13 million emails and phone numbers he collected during the campaign to help his pass his phony health insurance plan, supposedly the top priority of his first term.  Obama can't call on them cause too many would actually read and research it, and he knows it.  What would they think if they knew that it doesn't even cover the uninsured till 2013, whereas LBJ rolled out Medicare in 11 months back in the sixties?  Heck, many of those people are single payer advocates too.  So OFA can run ads, but cannot call the base.  So much for mobilizing and trusting the grassroots.  So much for those progressives who said the campaign was a good place to "train organizers" and that those 13 million names would be put to good use.


"If you want that good feeling that comes from doing things for other people, then you have to pay for it in abuse and misunderstanding..."
Zora Neale Hurston

Woops (0.00 / 0)
thanks for the correction.
[ Parent ]
it's not a correction (0.00 / 0)
you didn't do or say anything wrong.  

and this ought to get more eyeballs.

"If you want that good feeling that comes from doing things for other people, then you have to pay for it in abuse and misunderstanding..."
Zora Neale Hurston

[ Parent ]
I meant (4.00 / 1)
about Kip Sullivan. :)
[ Parent ]
The link on "kabuki" (0.00 / 0)
Here.

As I've said, I do understand and sympathize with the frustrations that Hamsher et al. must feel at having to defend a policy position -- public option -- that in their hearts and minds they know is inferior to single payer, may not even be workable, and is being sold with a combination charisma and chicanery that must be personally distressing to them. But that's no reason for Hamsher to take her frustrations out on commenters and C list bloggers that nobody reads!

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

[ Parent ]
well, it's amazing what transformational power FDL has (0.00 / 0)
and, this is a comment just for Lambert, but a guy who recently joins FDL, and cross-posts his HCAN blogs, suddenly becomes part of an A-list blog?

I am still scratching my head about that one....

[ Parent ]
Hi Ian- please, please edit (0.00 / 0)
As Selise points out, the article is by Kip Sullivan-

Andrew Coates put it up for him.

Kip Sullivan knows whereof he speaks-

Kip Sullivan wrote The Health Care Mess: How We Got Into It and How We'll Get Out of It  in 2006. Follow the link, and you can learn more about his credentials.

He's a friend of mine, and college classmate, and we have been emailing frequently about this mess of late.

VG

oh, hi, Selise, and thanks for giving me the heads up.  ;)

howdy! (0.00 / 0)
in about 2002 i attended a talk given by a pnhp member (it was too a human rights group i had done some anti-war stuff with). blew me away -- really informative and excellent in every way. got to know a little of their work then and have been following it since.

amazing group. and their website (and blog!) is a treasure trove of useful info.

[ Parent ]
thanks Ian- I see you fixed the problem (0.00 / 0)
xo  VG
Another Kip Sullivan article that needs to be read (4.00 / 1)
in a post at PHNP- Democrats' hype about health care reform will hurt them

First paragraph.. President Obama and Democratic congressional leaders are playing a dangerous game with health care reform. They are raising the public's expectations sky high before figuring out how to meet those expectations. They are promising to give us the moon - significant cuts in health care costs and universal coverage or something close to it - but even at this late hour they have failed to publish anything resembling a detailed plan to do that. And the hints they have given us about the "reforms" they are likely to endorse indicate they haven't got a clue how to cut costs.

Hi Bruce, hi Ian.

Yes, my (4.00 / 1)
essential argument has been something similar-bad policy, and this is bad policy, leads to bad results.  And bad results leads to bad electoral results.  Just pass a good bill or go home.
[ Parent ]
Yep- Ian read your posts... (0.00 / 0)
after I figured out where you were!  ;)

Thanks for posting this.

[ Parent ]
i'm sorta stymied (4.00 / 2)
about what to try to do.

hoping more info and honest discussions will help.

[ Parent ]
gonna pretend you asked me..... (4.00 / 6)
let the bastards recess this year, hold out, agitate and organize for single payer and let this rotten piece of fraudship sink beneath the waves.  

Since the Obama plan does not take effect and cover any of the uninsured till 2013 any goddam how -- compared to how LBJ and the crew rolled out Medicare covering forty million seniors in eleven months, let's do this again next year.  Passing a bill next year that works on that kind of timetable is better than passing this hurry up and wait crap.  

Run primary, second and third party challenges against blue dogs, Repubs and Democratic pretenders on the issue of single payer.

We win nothing if this bill is passed as it is,  It is designed to make the discussion go away without making the problem go away.  So the solution is to fight, not to let the discussion end at all.

"If you want that good feeling that comes from doing things for other people, then you have to pay for it in abuse and misunderstanding..."
Zora Neale Hurston

[ Parent ]
Sounds like a plan (4.00 / 1)
I don't handle the political angle -- I'd leave that to the experts, if I could find any -- but this sounds like sense to me.

As I keep saying: You can't buff a turd.

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

[ Parent ]
Actually, it's not just designed to make discussion go away (4.00 / 5)
It's designed to give for-profit health insurance another decade or so of our blood in the form of "rents" to the insurance companies.

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  
[ Parent ]
the mandate scares me (4.00 / 1)
because i think there's a good chance it's gonna be hated (haven't seen any polling data on that, so i could be way off base).

there's lots of good stuff -- like outlawing insurance companies from denying policies (or charging more) because of pre-existing conditions, fixing medicare and other regulatory matters -- that could be done without the mandate. no need to wait on any of that stuff.

at this point though, i can't justify to myself pushing for a mandate if it comes with a non-working public option.

..... but something i think it is critical, is that we have to find a way for the public option advocates and single payer advocates to work together. yeah, i'm pissed about being kept in the dark and fed substance free talking points too. but this isn't about that -- it's about health care for people in need.

my two cents. definitely subject to change.

[ Parent ]
Caught in Their Own Trap (4.00 / 3)
Obama and his co-conspirators in Congress are getting caught in their own trap.

They argued that health care reform is needed to reduce health care costs and the bite out of the economy that out-of-control premiums and co-pays take.

But then they cut deals with the private insurers that guarantee them the continuation of their profit margins and make it virtually impossible to cut costs.

The numbers will not work.

The only health care reform package that reduces costs is a single payer system.

So, as Dr. Marcia Angell of Harvard University Medical School said yesterday on Bill Moyers Journal on PBS, we have to go back to formulating the only system that will work costwise, which is a single payer system.

Nancy Bordier is the author of Re-Inventing Democracy. The book can be read free online by clicking here.

A prototype website illustrating how the Interactive Voter Choice System works can be accessed at Citizens Winning Hands.

I don't get Hacker's (0.00 / 0)
bullet points, unless he wanted to end up with a single payer.

If the private insurer has to have the same price as the PO, but you only get a subsidy if you choose the PO, why would anybody choose the private option?  

There is a real question about how the PO actually becomes a reality.  The logistics seem to me daunting, the start up costs alone would be enourmous, so Sullivan clearly has a point.

But this cite of Hacker suggests his view is of a PO that makes private insurance obsolete.  

Remember that PO gets no administrative savings (4.00 / 1)
That's because it's one plan among many.

Single payer, by contrast, saves $350 billion a year, according to the New England Journal of Medicine, the gold standard of medical journals.

That kind of money goes a long way toward helping out with start up costs.

And isn't it amazing that anybody's even talking about raising taxes on anybody -- even the rich, bless their hearts -- while leaving that kind of money on the table?

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

[ Parent ]
You missed the point (0.00 / 0)
Here is what I am trying to say: what Hacker proposed would lead to single payor insurance.  That is, in fact, why the PO is not structured that way in either the House or the Senate.  

So I guess I don't see in the end the significance of Sullivan's point unless it is to argue that Single Payor is the only workable solution.  That is an interesting observation, but single payor isn't on the table, will not be passed by this House and is not supported by the President.  

[ Parent ]
A public (4.00 / 2)
option not strong enough to lead to single payer, may not be strong enough to reduce costs.  Kip makes a pretty strong case that this is so.
[ Parent ]
Whatever passes this year (4.00 / 3)
is just the opening salvo. Health reform, financial reform, education, trade, labor, environment, campaign finance etc.; its going to be a long, long tedious battle year in and year out.

That's not to say that we'll inevitably win (the triumphalist's claim) as we may not. But it does mean that if we do win, it will be because we wore them down until their eyes glazed over.

In northern Mexico there's an Indian tribe that trains its members to run...for miles. They hunt deer by literally running them to death: small bands will chase after a deer until it drops from exhaustion.

That's the same thing we're going to have to do: Aim for the BIG PRIZE, and wear them down.

Tarahumara (4.00 / 1)

[ Parent ]
Don't you mean (4.00 / 1)
"keep our powder dry?" Or maybe that's last year's metaphor.

Montani semper liberi
[ Parent ]
comment fail (0.00 / 0)
.
[ Parent ]
NO matter What Bill is passed, even in the unlikely event of Conyers Bill (0.00 / 0)
becoming the bill that passes Reconciliation, it will be a Bill that represents "the art of the possible' Health care advocates in Canada are furious about the right wing nature of many Health polices in Canada, and work day in and day out to make the damn fit closer to the needs of people who could be healthy, a population that could be far healthier, a system that bleeds far too much money out for wealth and not health. It is a constant argument in political campaigns. It is a constant argument inside political parties that have progressive activists in them.

Insulting people doesn't help. I shove the healthcare dialogue further left where I live, in Canada (dual citizen), every day. I work to keep the health system public and to prevent the drift to privatize, which is the word used in Canada to tralk about efforts by Liberals and Conservatives who do things like Public Private Partnerships (PPP) which is letting corporations own hospitals, often American Corporations, and not publicly owned hospitals, because PPP just bleeds money to wealth, and has no affect on health.

Every bill ever passed is the result of "the art of the possible." Even in glorious the wonderful utopia Canada. Ask me sometime about some of the embarrassing horrors we are struggling to fix in Canada sometime.

Change
"We must break up the banks and never again let them get so big that they distort our politics and take down the economy.

[ Parent ]
No, that's completely opposite of what I mean (0.00 / 0)
I'm saying aim high, never settle for less, and don't stop until there's total victory. We're going to have to be ghoulishly relentless.
[ Parent ]
Given the same data, Ian (4.00 / 2)
you would have penned a much better post than Kip.

That said, How on earth do we stop this?

If the House bill fails as miserably as the article suggests and we know everything else will only make it worse, stopping this entire charade should be the top priority.

I can take a lot of abuse from Dems in order to avoid GOP control, but I can't take another broken arm without coverage. And I don't think any single citizen should have to either. The lies we are receiving from all our own corners only make it worse.

Well (4.00 / 2)
right now you might get coverage, but depending on your income you will be forced to pay for it, and since a broken arm isn't preventative you'll have a co-pay.  

I'm still somewhat torn on this.  The calculus is

a) shitty bill that won't contain costs and will force people to buy insurance and won't let most of the population have the public option, v.

b) all of the above, but still, some more people will have insurance and will get care and can't be stopped due to pre-existing conditions from getting a plan, so some lives will be saved and people helped and isn't that better than nothing?

I'm still thinking on it.  The refuseniks think the public optioners are immoral because they aren't going for full single payer, the PO types think that the refuseniks are refusing to be pragmatic and save some lives even if they can't save them all.

But I think to decide, you have to look down the line.  If the "reform" bill doesn't control costs and makes people buy inadequate insurance, what does that mean in 10 years (since it won't be in force for years anyway...)  Is it better to scrap this, given it's 2013 anyway, and start working to a better bill, or is this the only chance to even get something lousy but better than nothing?

[ Parent ]
the slight hope (0.00 / 0)
I have, is that this could be a thin end of the wedge, and could be expanded/improved in later years.  However given the absurd 2013 start date, this requires Obama to be re-elected along with a Democratic congress, which is a gamble enough.

Overall I am becoming much more pessimistic about this bill.  It looks more and more like playing around at the margins, like with the SCHIP expansion is all this Congress and President can manage to do effectively.  

When one feels a need to rationalize something along terms of prospective improvements, or tangential benefits, this is because the thing itself is poor on its merits, and that's what we're dealing with.  At best, it could bootstrap into something good, if Obama wins his 11 dimensional chess ploy.

[ Parent ]
ES, I don't agree (0.00 / 0)
Look, you are comparing apples and oranges, or something like that.  

Kip Sullivan has been specializing in the health care mess for over 2 decades.  He writes "wonky" articles for PNHP.  He's not a blogger, per se, but he's an expert in the field.

Ian is a blogger, who translates info he feels worthy and blogs about it.  Healthcare is not his speciality, and he has certainly said so before in his posts at OL and on his own blog.

Go here to learn more about Kip Sullivan.  

Frankly I think you are being unfair to both Kip and Ian, because they are not the same, and should not be expected to communicate in the same way.


[ Parent ]
Agreed (4.00 / 2)
If the costs remain this high, at some point one would think economics will dictate we will have to do the right thing.

If I could "change" two things it would be removal of any trigger, at least dramatically raise of where it kicks in (include middle income). Second, I would never force by law /mandate that folks have to purchase private insurance.  

Without the mandate (4.00 / 3)
you have anti-selection and an insured population that is unrepresentative, however, and that raises costs significantly.

The simplest solution is to just go single payer, tell businesses to take half the money they were spending on health care and give it to their employees, keep half for themselves, and then do some combination of corporate and progressive taxation to pay for it.  Most people would have more money in pocket after health costs than they did before, but no one ever explains it that way.

I think this may qualify for my my bear analogy "If you can't outrun the bear the bear doesn't care why you can't outrun it..."

[ Parent ]
that's exactly the reason to go for single payer anyway (4.00 / 2)
they're gonna fight you just as hard if you try to pass a public option with teeth.  heck, the problem is that we have never TRIED to really fight for single payer like we could.  and what has ever been won without a fight?

"If you want that good feeling that comes from doing things for other people, then you have to pay for it in abuse and misunderstanding..."
Zora Neale Hurston
[ Parent ]
Roughly twenty years ago (4.00 / 4)
The US forced po folk to buy liability auto insurance.

It did get most folks coverage, but it costs 400 to 700 percent more for the folks who can least afford it. Even with perfect driving records. I have never heard of a credible fight to rectify this over twenty years. Courts and local jails are filled with po folks who miss a payment etc. Often the fines are as costly as the insurance... except that triggers insurance rates to double or triple.

It's debtors prison and indentured servitude of the worst western order.

Considering everything you know about private health insurance in the US.. it should not be difficult to imagine just how awful it will be for the least informed, lowest income folks when being forced to deal with them.

it will certainly be a trigger to put lots of minority kids into foster care... (4.00 / 3)
miss that insurance payment and you are an abusive and neglectful parent.

"If you want that good feeling that comes from doing things for other people, then you have to pay for it in abuse and misunderstanding..."
Zora Neale Hurston
[ Parent ]
I argued vociferously over at Daily Kos... (0.00 / 0)
where I decided to spend a little time after a hiatus, that the "reform" is but a sham.

What bothers me most is that Obama came to power in a wave, and was perfectly positioned to push through single payer by energizing a public that already wants it.  Instead, he showed his true colors by loading his Administration with Establishment types and secretly meeting with the current health care stakeholders who are the problem in getting reform.

Will the supporters who were blinded to the marketing message of hope ever see that sometimes words don't matter, that rhetoric alone is no indication of action?  It was easy to see who Obama looks to for support, a better predictor in my view.

I suspect that Hillary Clinton would have been more effective in this area.

agreed (4.00 / 1)
I believe Hillary would have been more effective on this subject too. Much more effective.

Government by organized money is no better than government by organized mob..... FDR
[ Parent ]
Bait and Switch on Public Option? | 40 comments
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