As Ian Welsh points out, what passes for a public option in the bills now being considered (a "public option" that isn't even guaranteed to pass, nor should it in its current state) is not scaring Big Insurance or Big Pharmaceutical companies. Why is this? In an earlier blog entry, Welsh describes the reasons why (I've boldfaced the most relevant points):
Because it has no built in customer base, which increases its upfront expenses for advertising and a sales-force significantly. People who have company healthcare plans can't join.
Doctors, hospitals and so on are not required to accept it, and providers will not accept it if it provides below market rates unless it also provides large numbers of patients, which it can do because it isn't pre-populated and isn't a good buy for insureds unless it can provide a low premium, which requires it to pay low rates.
It must make a profit in order to return the money up-fronted to it, and it has only 10 years to do that, but it has to start from scratch, as noted above.
The most that can be said in favor of the weak "public option" is that it MIGHT be used as the dumping ground for the poorest patients, who for various reasons aren't qualified to receive Medicaid - and even then, it's unlikely that such patients will be granted access to adequate health care under the program.
STATE BLOGS
