Tuesday, February 23, 2016

qotd: Hillary Clinton resurrects public option, or not?

Politico Pulse
February 23, 2016
Clinton resurrects public option
By Dan Diamond

Hillary Clinton is bringing back the "public option," a liberal health
reform that so far has gotten little attention this campaign cycle as
Bernie Sanders has pushed an even more progressive single-payer plan.

The public option — initially conceived as a government-run alternative
to private insurance — was backed by Clinton in her 2008 campaign and
was the subject of intense debate during the drafting of the Affordable
Care Act. However, Democrats abandoned the measure after Senate
moderates said they wouldn't vote for it because it expanded the
government's role in health care too far.

Clinton is again making clear she supports a version of the public
option. This time, though, she wants to allow states to opt in,
according to a newly updated policy position on her campaign website.

How would it work — and why now?

Clinton appears to be suggesting that states could use the ACA's 1332
waivers to "empower states to establish a public option choice" in 2017.
It's plausible that liberal governors and legislatures would opt in,
while keeping the fight over this progressive idea largely out of

It's unclear exactly what Clinton's thinking is on this, however. The
campaign didn't respond to repeated requests from POLITICO to clarify
its new policy language.

Just last month: Clinton said 'we couldn't get the votes' for public option.

While Clinton's spokesperson told PULSE that she has consistently backed
the public option since the 2008 campaign, Clinton pointed out just last
month that Congress wasn't able to get it through during the ACA. "There
was an opportunity to vote for what was called the public option,"
Clinton said during a debate in South Carolina, after she rebuked
Sanders' plan as impractical. "But even when the Democrats were in
charge of Congress, we couldn't get the votes for that."



Hillary for America

Affordable health care is a basic human right.

Hillary has never given up on the fight for universal coverage—and she
won't stop now. Building on the Affordable Care Act to expand coverage
for millions of Americans, Hillary will:

* Continue to support a "public option" — and work to build on the
Affordable Care Act to make it possible. As she did in her 2008 campaign
health plan, and consistently since then, Hillary supports a "public
option" to reduce costs and broaden the choices of insurance coverage
for every American. To make immediate progress toward that goal, Hillary
will work with interested governors, using current flexibility under the
Affordable Care Act, to empower states to establish a public option choice.



Physicians for a National Health Program
May 26, 2009
Public Plan Option in a Market of Private Plans
By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.

The "public plan option" won't work to fix the health care system for
two reasons.

1. It forgoes at least 84 percent of the administrative savings
available through single payer. The public plan option would do nothing
to streamline the administrative tasks (and costs) of hospitals,
physicians offices, and nursing homes, which would still contend with
multiple payers, and hence still need the complex cost tracking and
billing apparatus that drives administrative costs. These unnecessary
provider administrative costs account for the vast majority of
bureaucratic waste. Hence, even if 95 percent of Americans who are
currently privately insured were to join the public plan (and it had
overhead costs at current Medicare levels), the savings on insurance
overhead would amount to only 16 percent of the roughly $400 billion
annually achievable through single payer — not enough to make reform

2. A quarter century of experience with public/private competition in
the Medicare program demonstrates that the private plans will not allow
a level playing field. Despite strict regulation, private insurers have
successfully cherry picked healthier seniors, and have exploited
regional health spending differences to their advantage. They have
progressively undermined the public plan — which started as the single
payer for seniors and has now become a funding mechanism for HMOs — and
a place to dump the unprofitably ill. A public plan option does not lead
toward single payer, but toward the segregation of patients, with
profitable ones in private plans and unprofitable ones in the public plan.


Comment by Don McCanne

You remember the public option. During the drafting of the Affordable
Care Act (ACA), efforts were made to include a public option - a
government-run plan that would compete with the private health plans in
the insurance marketplace. If the private plans proved that they could
provide greater value, then they would prevail. If the government could
do a better job, then the public option could expand by demand and
eventually become the single payer for the nation, so supporters believed.

The original concept for the public option was to allow individuals to
buy into the Medicare program instead of purchasing private insurance.
There were some obvious problems. Medicare lacked some important
features required of the private plans such as catastrophic coverage -
establishing a maximum out-of-pocket responsibility of paying for health
care. Also, the existing Medicare pool was composed of the elderly and
those with long term disabilities - expensive groups to insure. The
exorbitant premium that would have to be charged could not be
competitive with the private plans.

It was then decided to establish a new public insurance program that was
designed like the private plans and that would have to follow the same
rules. The insurance industry immediately opposed this since it would be
"unfair" competition considering the government resources backing up the
public plan, and the inherently higher administrative costs that the
private insurers face, not to mention the need to profit from their
operations - profit not being a feature of a publicly-owned insurer.
Several (anti-competitive) features were proposed for the public option
which would give the private insurers a "fair" playing field.

The insurers were still concerned that they could not compete against
even a restricted government plan, and thus they continued to oppose it.
There is a basis for that concern since the private Medicare Advantage
plans are able to "compete" with the traditional Medicare program only
because of the overpayments that are being made to the private plans. If
they were in the same playing field, the private plans would perish.
Nevertheless, the issue of the private option became moot when Sen.
Joseph Lieberman, with no votes to spare, threatened to kill the entire
Affordable Care Act if the public option were included.

We were left with the co-ops as a substitute for the public option. The
co-ops are non-profit organizations in which the insured members are the
owners. Congress, under the Republicans, has refused to provide promised
funds, and half of them have collapsed. They are now being used by
opponents of single payer to "prove" that the government would be
incapable of running a single payer system - an obvious non sequitur.

Since the enactment of ACA there have been endless calls to add a public
option. Single payer failed to gain traction because of the pervasive
meme that single payer was not politically feasible. But if we could
just get a public option, that would automatically evolve into a single
payer system, they said.

Then along came Bernie Sanders. He carried the message that not only was
single payer politically feasible, it was a moral imperative to achieve
health care justice for all.

To the surprise of Hillary Clinton and her campaign staff, Bernie
Sanders came out of nowhere and gained traction carrying the single
payer banner, and, as a result, has become a genuine challenge to her

Hillary Clinton has always been an opponent of single payer and instead
has supported the private insurance industry. Some have misinterpreted a
statement of hers many years ago as supporting the fact that we would
have single payer in the United States. But that statement was not in
support of single payer but rather was her threat to us that if we did
not accept her managed competition model of reform, we would have single

So what was her campaign to do? They decided to bring back the concept
of a public option to appease those who were turning to Sanders because
of his advocacy of single payer. They are relying on the meme that the
public option is our door to single payer (even though it is not true).
But look at what her version of the public option is.

She says we should build on ACA. She has proposed no new federal public
option legislation but she is merely suggesting that the states look at
Sec 1332 of ACA which authorizes waivers for limited innovations on a
state level. Imagine the difficulties that states would have, within the
confines of Sec 1332, in building their own intra-state public plan.
Unless they used private insurance innovations such as high deductibles,
narrow provider networks, and tiered services, the premiums would be
unaffordable to most. A single payer system would be funded equitably
through progressive taxes, but you could not do that with a public
option since that is only one plan in a multi-payer system.

In 2009, David Himmelstein and Steffie Woolhandler explained in very
brief terms why the public option is a flawed concept (reproduced
above). Hillary Clinton is now showing us how it is a diversion from the
reform we really need - single payer. It is up to us, the people, to
convince our politicians that single payer is what we want. It will not
happen without us.

/Physicians for a National Health Program (PNHP) is a nonpartisan
educational organization. It neither supports nor opposes any candidates
for public office./

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