September 22, 2016
Calls for a “public option” in healthcare – a publicly run health insurance plan that would compete with private insurers – have made a comeback in recent days. But it’s not a comeback like Robert Downey Jr. after rehab or the Cleveland Cavaliers after game 4 of the finals. More like Corey Feldman as a dancer-singer, or Speed 2 the sequel.
A group of Democratic Senators including Bernie Sanders introduced a Senate Resolution for a public option on September 15. It’s not legislation and contains no details, but rather a symbolic statement of support for the concept. The resolution is backed by a group of online organizations and petitions, but is not part of any grassroots campaign. The proposal comes, somewhat suspiciously, after Bernie Sanders nearly staged a coup within the Democratic Party running on a platform of single-payer reform, but subsequently agreed to support Clinton and her call for a public option during the general elections.
While there’s no bad time to champion a good idea, the public option is limited as a solution to the problems that ail the Affordable Care Act, and even more problematic as a vehicle for building a social movement over the next 2 years when, in all likelihood, neither Democrats nor Republicans will be able to advance major legislation through Congress. A strong public option would generate a similar level of political opposition as pushing improved Medicare for All, but without the benefit of solving the healthcare crisis. In the current political context, it offers neither vision nor political pragmatism.
The public option is an appealing policy for Democrats during an election year, since it’s a public plan that fits with free market ideology and polls well. It promises to drive down private insurance costs through competition, and there are very few of us who wouldn’t give anything for relief from healthcare costs and the promise of a more humane insurance plan.
Unfortunately, competition does not work for health insurance, since the “cost” of insurance plans – what we’ll pay in premiums, co-payments, deductibles, and uncovered care – is almost impossible for even intelligent people to determine. Study after study has shown that very few people select the plan that’s cheapest for them. One experiment found that only Columbia MBA students chose insurance plans better than randomly picking a plan out of a hat.
Insurers win customers in the marketplace not by selling the “cheapest” plans, but by pushing plans that are appealing when you buy them but a nightmare when you have to use them: this means lower upfront costs (premiums) with much higher uncertain costs at the point of care (deductibles, co-pays, out-of-network care, uncovered benefits, etc).
So in order for the public option plans to “compete,” they will be under pressure to establish narrow networks, limit benefits, and utilize other practices that allow them to sell more insurance while shifting costs onto patients.
This is exactly how a very similar policy included in the ACA played out. Obamacare allowed the creation of non-profit cooperative insurance plans designed to compete with commercial insurers. The coops have failed spectacularly over the past two years, with 17 of the 23 coops created in 2014 closing their doors by 2016. The plans did not have the size or bargaining power to negotiate low prices with large hospital chains and physician networks, and offered premiums on the exchanges too low to cover their expenses.
The upsurge of national support for improved Medicare for All generated by the Sanders campaign has created a tremendous opportunity to advance the movement for healthcare justice in the United States, regardless of the posturing that will continue to take place during the general elections. Now is the time to build on that momentum through organizing and outreach: take action today!