http://pnhp.org/blog/2009/07/20/bait-and-switch-how-the-%E2%80%9Cpublic-option%E2%80%9D-was-sold/The people who brought us the “public option” began their campaign promising one thing but now promote something entirely different. To make matters worse, they have not told the public they have backpedalled. The campaign for the “public option” resembles the classic bait-and-switch scam: tell your customers you’ve got one thing for sale when in fact you’re selling something very different...When the “public option” campaign began, its leaders promoted a huge “Medicare-like” program that would enroll about 130 million people. Such a program would dwarf even Medicare, which, with its 45 million enrollees, is the nation’s largest health insurer, public or private. But today “public option” advocates sing the praises of tiny “public options” contained in congressional legislation sponsored by leading Democrats that bear no resemblance to the original model.
According to the Congressional Budget Office, the “public options” described in the Democrats’ legislation might enroll 10 million people and will have virtually no effect on health care costs, which means the “public options” cannot, by themselves, have any effect on the number of uninsured. But the leaders of the “public option” movement haven’t told the public they have abandoned their original vision. It’s high time they did.
The bait
“Public option” refers to a proposal, as Timothy Noah put it, “dreamed up” by Jacob Hacker when Hacker was still a graduate student working on a degree in political science. In two papers, one published in 2001 and the second in 2007, Hacker, now a professor of political science at Berkeley, proposed that Congress create an enormous “Medicare-like” program that would sell health insurance to the non-elderly in competition with the 1,000 to 1,500 health insurance companies that sell insurance today....Hacker claimed the program, which he called “Medicare Plus” in 2001 and “Health Care for America Plan” in 2007, would enjoy the advantages that make Medicare so efficient – large size, low provider payment rates and low overhead. (Medicare is the nation’s largest health insurance program, public or private. It pays doctors and hospitals about 20 percent less than the insurance industry does, and its administrative costs account for only 2 percent of its expenditures compared with 20 percent for the insurance industry.)
Hacker predicted that his proposed public program would so closely resemble Medicare that it would be able to set its premiums far below those of other insurance companies and enroll at least half the non-elderly population. These predictions were confirmed by the Lewin Group, a very mainstream consulting firm. In its report on Hacker’s 2001 paper, Lewin concluded Hacker’s “Medicare Plus” program would enroll 113 million people (46 percent of the non-elderly) and cut the number of uninsured to 5 million. In its report on Hacker’s 2007 paper, Lewin concluded Hacker’s “Health Care for America Plan” would enroll 129 million people (50 percent of the nonelderly population) and cut the uninsured to 2 million.
Until last year, Hacker and his allies were not the least bit shy about highlighting the enormous size of Hacker’s proposed public program. For example, in his 2001 paper Hacker stated:
...approximately 50 to 70 percent of the non-elderly population would be enrolled in Medicare Plus…. Put more simply, the plan would be very large…. critics will resurface whatever the size of the public plan. But this is an area where an intuitive and widely held notion – that displacement of employment-based coverage should be avoided at all costs – is fundamentally at odds with good public policy. A large public plan should be embraced, not avoided. It is, in fact, key to fulfilling the goals of this proposal. (page 17)
In his 2007 paper, Hacker stated:
For millions of Americans who are now uninsured or lack … affordable work place coverage, the Health Care for America Plan would be an extremely attractive option. Through it, roughly half of non-elderly Americans would have access to a good public insurance plan…. A single national insurance pool covering nearly half the population would create huge administrative efficiencies. (page 5)
MAJOR EXPOSITION OF THE CURRENT PUBLIC OPTION NON-PLAN GOES HERE--SEE LINK
What next?
Those of us in the American single-payer movement must continue to educate Congress and the public on the need for a single-payer system. We must also convince advocates of the “public option” that they have made two serious mistakes and, if they learn quickly from these mistakes, that real reform is still possible.
The first mistake was to think that a “public option” that merely took over a large chunk of the non-elderly market (as opposed to one that took over the entire market) could substantially reduce health care costs and thereby make universal coverage politically feasible. Any proposal that leaves in place a multiple-payer system — even a multiple-payer system with a large government-run program in the middle of it — is going to save very little money. Even if Hacker’s original Health Care for America Plan had taken over half the non-elderly market and then reached homeostasis (something Hacker swore up and down it would do), the savings would have been relatively small. The reason for that is twofold. First, any insurance program, public or private, that has to compete with other insurers is going to have overhead costs substantially higher than Medicare’s. (It is precisely because Medicare is a single-payer program that its overhead costs are low.) Second, the multiple-payer system Hacker would leave in place would continue to impose unnecessarily large overhead costs on providers.
The second mistake the “public option” movement made was to think the insurance industry and the right wing would treat a “public option” more gently than a single-payer. Conservatives have a long history of treating small incremental proposals such as “comparative effectiveness research” as the equivalent of “a government takeover of the health care system.” It should have been no surprise to anyone that conservatives would shriek “socialism!” at the sight of the “public option,” even the mouse model proposed by the Democrats.
The bait-and-switch strategy adopted by the “public option” movement has put the Democrats in a terrible quandary. Seduced by the false advertising about the potency of the “public option” to lower costs, Democrats have raised public expectations for reform to unprecedented levels. Failing to meet those expectations during the 2009 session of Congress, which is inevitable if the Democrats continue to promote legislation like the bills released in June, is going to have unpleasant consequences. Is there no way out of this quandary?
Conventional wisdom holds that if the Democrats don’t pass a health care reform bill by December, they will have to wait till 2013 to try again. But if the “public option” movement were to join forces with the single-payer movement, the two movements could prove the conventional wisdom wrong. This won’t happen, obviously, if the “public option” movement fails to perceive the reasons it failed.
It is conceivable the “public option” movement could decide the bait-and-switch strategy was wrong and that their only error was not to stick with Hacker’s original model. It should be obvious now that that would also be a tactical blunder. We have plenty of evidence now that conservatives will react to the mousey version of the “public option” as if it were “a stalking horse for single-payer.” We can predict with complete certainty they will treat Hacker’s original version as something even closer to single-payer. If a proposal is going to be abused as if it were single-payer, why not actually propose a single-payer? At least then, when a particular session of Congress comes and goes and we haven’t enacted a single-payer system, we will have educated the public about the benefits of a single-payer and have further strengthened the single-payer movement.
To sum up, “public option” advocates must choose between continuing to promote the “public option” and seeing their hopes for cost containment and universal coverage go up in smoke for another four years, and throwing their considerable influence behind single-payer legislation. At this late date in the 2009 session, it is unlikely that a single-payer bill could be passed even if unity within the universal coverage movement could be achieved. But if the “public option” wing and the single-payer wing join together to demand that Congress enact a single-payer system, December 2009 need not constitute a deadline.
Kip Sullivan belongs to the steering committee of the Minnesota chapter of Physicians for a National Health Program.
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