The horizon is not so far as we can see, but as far as we can imagine

The Reason Insurance Company Execs aren’t Scared of the Public Option

So, apparently an insurance company economist has admitted that private insurance could survive a public option, (h/t Digby):

“I believe the private system is important because it brings innovation, it brings energy, it brings change, it brings ideas that are often used in the public sector system as well,” said Richard Collins, senior vice president for underwriting, pricing and health care economics at UnitedHealthcare. “I think we can have both a public and private system.”

Predictably, progressive bloggers want to use this to sell the public option.  Fair enough.

But why aren’t executives scared of a public option any more?  Because the public option as written in the two bills which contain it is so weak that it will not have significant, if any, pricing power.

The public option originally proposed by Hacker would have had over 100 million people enrolled in it.  The current one would have, according the Congressional Budget Office, just over 10 million.  No one with an employer plan would be allowed to join, it has no pre-enrollment, reimbursement is not linked to Medicare, doctors are not required to take it if they also take Medicare, and so on.

It’s not a robust public option.  It is questionable if it’s even a viable public option.

I’d rather not have it if I were an insurance company exec, because once it exists it could always be improved, but in its current state, I certainly wouldn’t be scared of it.

The fact that at least one insurance company executive isn’t scared of the public option shouldn’t be a cause for celebration, it should tell you that the public option has been horribly compromised.


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  1. Ashley

    If given the choice, I think most American would feel more safe with private health insurance, but unfortunately many Americans don’t have this as an option. Therefore, I think a public option is really important for those who are either in between jobs, unemployed or young and just out of college. Lets not forget how many employers DONT provide health insurance. Medicare/Medicade isn’t helping the young or middle class.

    I think a dual system would be good for keeping competition and innovation alive while also serving the American public who can’t afford private health insurance.

  2. But I thought that the current system was a Holocaust? Odd, then, or not, that the Dems are reinforcing it…

  3. Ed

    We have a public option now. Its called “Medicaid”.

    Is this an exercise in giving us what we have already, and we should be thankful, or are we going to lose what little we have?

  4. 1. If we are going to continue to have private health insurance, the way to introduce more competition in the private health insurance market is to revoke their exemption from anti-trust laws.

    2. Any public option, even a weak one, is better than no public option.

    3. A universal mandate without a strong public option, that is, an option available to virtually anyone who opts for it, is a poison pill for Democrats.

    4. No solution other than single payer is going to work to control cost and provide universal care, so eventually that is going to happen of necessity.

  5. Linden

    Medicaid is not a public option, because access to it is strictly limited. It also insures a lot of very sick and elderly people, freeing up the insurance companies to make bigger profits. That’s why it hasn’t acted as a cost brake. A true public option would be open to everyone, and that’s just what we’re not going to get.

  6. senecal

    Ironic that the universal mandate, originally justified as necessary to make a public option viable, now hangs on as a whip for punishing the poor.

  7. Tom Robinson

    The Swiss plan, all private but all covered, gets Sunday coverage in the New York Times. This is where we’re headed in the US. It’s not going to be like Canada; it doesn’t have to be like Canada; it might even be cheaper if it’s not like Canada.

    The US helath plan is going to be regulated private insurance. The insurance companies know it has to work, or they will have federal competition.

    I suspect this will irritate everyone who has fought for single-payer for so long, but I don’t see single payer coming. I see universal coverage coming, and that will be progress compared to the lack of universal coverage.

  8. Ian Welsh

    The Swiss

    a) regulate their insurance companies very strictly
    b) Keep profits on basic insurance within (low) limits
    c) have a much higher median income than the US
    d) have a higher cost of insurance than Canada or most other countries, doing it private, even the Swiss way, is more expensive.

    If the US is willing to massively regulate its insurance companies, then the Swiss model can work in the US. Tom is right–they key is REGULATION – heavy regulation.

    I leave it as a reader exercise to decide how likely that is.

  9. DWCG

    Hmmm…so I’m trying to remember what heavily regulated industry does not run-roughshod over the American people:


    How could I be so naive as to think we couldn’t replicate those great success stories with health care. Sign me up now!

    And universal coverage? Really? What good is coverage if you can’t afford to eat good food, and have to work overtime and live in rat and mold infested homes that you can’t afford to mitigate, because your spending all your money on a phony private health insurance product.

    By the way, in the course of this discussion, has ANYONE, I do mean ANYONE suggested that private insurers would reduce their atrocious rate of claim denials, let alone stop the practice?

    Seriously, forgive me for not dancing in the streets about being forced to pay for a private insurance product that will continue to deny me care.

  10. senecal

    Relevant in the broad sense to this issue is Diana Johnstone’s article in the weekend Counterpunch: “Is Socialism Dead?” — a pretty good update on the electoral weakness, if not irrelevance, of the Left in Europe. Can the US in any way be more advanced than Europe in this?

  11. Ian Welsh

    There was a time when energy utilities were highly regulated and succesfully so. For that matter, the financial sector was pretty well regulatred from the New Deal through about the mid 70’s to early eighties. But the social contract on such has broken down since then.

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