With the introduction of President Obama’s blend of the House and Senate health care reform bills, there’s been a flurry of activity in the Netroots over the missing public option. Several groups are mobilizing for it at the same time that key Senators who supported it in the past are quietly leaving it on the table. Because it is still a cause of controversy and division, I think it’s worth listing the arguments for and against it in as objective a fashion as possible.

Arguments in favor

1. A public option creates competition in the marketplace.
2. A public option saves money.
3. A public option puts downward pressure on premium costs.
4. A public option establishes a framework for a national single payer system in the future.
5. A public option gives individuals a choice not to fund commercial health insurance companies.

Arguments against

1. A public option establishes a new government agency.
2. A public option puts government in charge of making health decisions.
3. A public option duplicates the Medicare framework already in place.
4. A public option will be costly to initiate and manage.
5. A public option may result in providers refusing to participate because of low payment rates.
6. A public option may result in adverse selection; that is, where the oldest and sickest gravitate to the public plan, driving government costs up.

Within this framework, there are individual arguments to be made about whether each point is valid or not. My goal here was simply to list the primary arguments for and against and let the discussion flow from there.

Are there any I missed? Leave a comment and I’ll add to the list.

It is shocking to me that one Senator, in this case Joe Lieberman, can bring something as important as health care reform to a halt. Clearly everyone has worked very hard to compromise on this bill, and blowing it out of the water this late in the game, especially when you are now refusing to vote for something you championed just a few years ago, seems selfish to me. We need this reform, even if it’s bad.

Why bother with a bad bill? Why not go back and start from the beginning and get it right, as the Republicans argue? Because anything that dislodges old ways of doing things, no matter how slightly, forces us to reconsider, shakes things up, changes the picture in the kaleidoscope.  I read Atul Gawande’s article in last week’s New Yorker and I believe he’s right. We can’t have real reform through legislation, public option or not.  We can only have that when all the players involved decide to change their attitudes toward health care.

Right now, the provider is being blamed for most of the cost increases. But most health care providers I know are in business to heal people, and if they were left to their own devices, they could lower their cost of care by themselves. Do you think they want eight or nine employees to support each physician, each with taxes, benefits, and all the issues that come with employees?

Of course not. But a lot of their costs come from compliance: with insurance companies, with government regulations, with absurd CYA efforts to avoid being sued. That, rather than anything else, raises the overhead of the individual provider.

For the hospital, it’s a bit more complex, because many hospitals have boards, and shareholders, and pressures to generate revenue.  They also have to deal with the “cost shift” : treating the uninsured free and charging the insured $10 per aspirin.  That takes a lot of paperwork and administration,  and then they also have  to contend with  the things that cripple doctors –regulations and insurance companies.

For the payer, the incentive to increase profits and provide “shareholder value” is paramount. Nothing else matters. The insurance company is in it for the money, pure and simple.

For the patient, it’s getting the newest and best treatment, whether useful or not. (This morning I heard Deepak Chopra say that most of the prescriptions Americans take are of marginal utility, and that we endure horrible side effects as a result).

We are overcharging, over-diagnosing, and over-treating. Our health care system is as soft and obese as our population. We could lower costs just by putting the entire country on a health care diet: less care, rather than more.

But we will never do that without the impetus of some regulatory change. It’s a shame, because we should. We should be able to change ourselves without a crummy law.

My answer: A little of both. Let’s start with an assumption that the rumors are actually true. It’s an assumption, subject to change later. (Update: Here’s the official release from Harry Reid with no details but also no eulogy for the public option. Update #2: Talking Points Memo has some sketchy unconfirmed anonymous details that seem to mesh with my thinking.)

Medicare Expansion Age 55-65

This is a great development for people in this age group. It’s far better than what they would have gotten under the public option on the table. Medicare-negotiated rates for services are just lower than they would ever have gotten with the public option from the House or the Senate.

Why does it work for everyone? First, because it opens an existing program, so there aren’t a huge amount of administrative startup costs. It also solves the cash flow problem by requiring those of us in that aging baby-boomer age group to pay premiums in order to buy in. That brings additional cash into the Medicare system on some sort of actuarially calculated basis, while buying time for some of the cost-saving reforms to kick in and push the solvency range even higher.

Non-profit co-ops with rates negotiated similar to FEHBP

This would be a plan offered by private insurers, but with the same terms that the Federal government gets on its rates. The insurer must be a non-profit entity and approved by the OPM (Office of Personnel Management). Insurers are paid a fee of up to 1%, and the rates are significantly less than what we’re paying for individual policies now.

Don’t forget who would be covered

The only people eligible for this would be those who aren’t covered by employer plans. This is the primary issue. Yesterday there was an admission by one Senator that they wanted to separate health care/health insurance from employment but couldn’t, because they couldn’t get any agreement from big business.

For someone like me who is unemployed/self-employed with one uninsurable child, one healthy, a husband 4 years older than me, our options would look like this:

• Husband buys into Medicare
• Uninsurable kid buys into national high risk pool, or we release him as a dependent and he is covered under Medicaid.
• Daughter and I go out to the individual market through 2013 when I turn 55.

It’s an incredibly piecemeal approach, but it would actually work for us.

Something to consider

One of the most-overlooked features of the reform packages is the standardization of benefit packages. It’s worth remembering this when evaluating the value of this bill. Right now, coverage is all over the place. Under the bill, there are minimums. Here just some of the main ones:

• Outpatient services, clinic, emergency room, lab, etc
• 100% coverage of preventative services
• Prescription drug coverage
• Hospitalization

Also, standardized out-of-pocket costs and maximums, which are also covered by subsidies for low-income families and individuals.

That’s a pretty substantial list of benefits, and is certainly more than what I was able to find when shopping individual (affordable!) policies early this year.

But..but…no public option?

Remind me when this bill has been signed to share my prediction back when the process began. Until it gets through the entire legislative process, I’m keeping my big yap shut. Not because I think the powers that be listen to me, but because I don’t want to start a firestorm among those who read what I write before I have water to fight it with.

When is a public option not a public option but it is a public option? When they call it something else, pull other ideas in that can be supported, re-use existing institutions to accomplish the goal, and they get 60 to agree to it.

After all, we can tilt after this thing called a public option and pound this bill into oblivion, guaranteeing that Democratic majorities in the Senate and House will be ground to dust, or we can step back, figure out the goal, and see if there is a pathway to the goal that makes something that looks like a public option but is really called a non-profit national co-op and Medicare expansion.

(Note: rumors of Medicaid expansion seem to indicate that it’s not going to happen, but the Medicare expansion looks to be gaining traction.)

The newest effort to undermine health care reform appears to be an effort to convert subsidies for health insurance to taxes. The Wall Street Journal:

Think about a family of four earning $42,000 in 2016, which is between 150% and 200% of the federal poverty level. CBO says a mid-level “silver” plan will cost about $14,700 in premiums, of which the family will pay $2,600—since the government would pay the other $12,100. If the family breadwinner (or breadwinners, because the subsidies are based on combined gross income) then gets a raise or works overtime and wages rise to $54,000, the subsidy drops to $9,900. That amounts to an implicit 34% tax on each additional dollar of income.

Well, not exactly, and it’s rather surprising to hear a Rupert Murdoch mouthpiece argue for a higher subsidy level. After all, the House bill (HR 3200) called for subsidies to 400% of the Federal poverty level. But let’s deconstruct the numbers a bit.

The argument goes like this: If the government subsidizes $12,100 and the worker earns an additional $8,000, the subsidy drops by $2,200, or $183.33/month. Dropping the subsidy is not an implicit tax. It is the expectation that as wages rise, workers can assume a greater portion of the cost. Suggesting that it’s an effective tax is simply a dishonest argument against any reform at all.

With that argument debunked, let me also say this: I think the Baucus plan brings the worst of all worlds to the table. Forcing individuals to purchase insurance (subsidies or not) without a strong public option or option to buy into Medicare as a choice is a money grab for insurance companies without any corresponding offset to individuals.

(h/t Pal2Pal.com)

What you really want to know, and are too polite to ask, is how sick am I and what’s ahead? Yesterday I got some answers and am happy to share them with you.

I’ve been on Gleevec for one month, and yesterday’s test results show that it’s WORKING. It wasn’t a given that it would, so this is a real relief. Whew!

I’m still very sick, and the Gleevec is working on my bone marrow to kill the cancer cells. Our goal is to get rid of every one of those demons and replace all the bad cells with good ones. The doctors say the situation is “being managed” and all signs show we’re going to get the cancer cells to zero and then work on keeping them there. At that point, I will be in remission.

Remission is the state of absence of disease activity in patients with known chronic illness that cannot be cured. It is commonly used to refer to absence of active cancer when this disease is expected to manifest again in the future.

Will I be cured? – NO. Leukemia comes in two forms, acute and chronic. I will be in a chronic phase and my body will accllimate to the Gleevec and will need continual monitoring. At some point I will have to “dose up” on Gleevec and adjust to the higher dosage. I’m at risk for changing to an acute stage of the illness if the drug therapy doesn’t work or if I stop taking the drug. Yes, going to an acute stage could kill me.

I mentioned before they don’t know what causes this. Well, they also don’t know why it sometimes goes from a chronic state to an acute state, so that’s another reason why it has to be constantly monitored and I’m in for a lifetime of blood tests.

Yes, this is a life-changing situation. I have worked since I was eight years old and was paid to baby sit. I have advanced in my career, and continued my education, resulting in an income, and income taxes, that have always been higher than average norms. Up until seven weeks ago I was a productive, active member of the community. I’m someone who’s been priced out of the individual health insurance market due to a pre-existing condition. My last employer, a major health insurance company, hired people through a staffing firm or 1099 contracting and did not provide benefits. This type of staffing is common in Arizona and has grown across the country during the recession.

Today I’m fighting cancer, have been bankrupted by the illness and have been placed on Arizona’s version of the Medicaid system so that I can live. You can call me your neighbor in need and be grateful for the support, or you could choose to disparage me and call me one of those “welfare people. ”

Yesterday, the topic of healthcare reform came up while the nurse practitioner was “treating” me. She said that her solution for the problem was to “make” those “welfare people” go get a job, “at McDonald’s if they have to.”

Some days the ignorance and attitudes of people get to me and make me sicker than the cancer. Yesterday was one of them. Today some friends are participating in a protest event related to healthcare reform. They know that what happened to me could happen to any of us. I truly appreciate their support, and I may call on you for some bail bond money if any of them get arrested.

Dennis Prager posed 10 questions to supporters of “Obamacare”¹ This post answers them in the order asked. I have endeavored to support my contentions with facts from sources which are non-partisan, but I will state up front that I am a supporter of comprehensive health care reform that includes a robust public option.

1. Question 1: “If Medicare and Medicaid are fiscally insolvent and gradually bankrupting our society, why is a government takeover of medical care for the rest of society a good idea? What large-scale government program has not eventually spiraled out of control, let alone stayed within its projected budget? Why should anyone believe that nationalizing health care would create the first major government program to “pay for itself,” let alone get smaller rather than larger over time? Why not simply see how the Democrats can reform Medicare and Medicaid before nationalizing much of the rest of health care?

   Answer: It goes without saying that Mr. Prager has posed 4 questions here, but since they’re related, I’ll tackle them as one. The fundamental question he appears to be asking is “Why should I believe government can do this right when they’ve done everything else wrong?”

   Mr. Prager’s premise is flawed. It assumes that the problems with Medicare and Medicaid relate to the government operation of those funds when in fact, the real problems stem from the so-called “Medicare Reform” and Medicare Advantage plans. Medicare Advantage Plans are a ‘Medicare Alternative” provided by private insurers; in essence, an effort to privatize Medicare. According to the Commonwealth Fund, payments to private insurers increased costs over what would have been paid had the Medicare system remained under public oversight.

   The Medicare Modernization Act of 2003 sharply increased payments to private Medicare Advantage plans. As a result, every plan in every county in the nation was paid more in 2005 than its enrollees would have been expected to cost if they had been enrolled in traditional fee-for-service Medicare. The authors calculate that payments to Medicare Advantage plans averaged 12.4 percent more than costs in traditional Medicare during 2005: a total of more than $5.2 billion, or $922 for each of the 5.6 million Medicare enrollees in managed care.

   A glance at insurers’ profit reports confirms this. From BusinessWeek’s report about United Healthcare’s record profits for the second quarter of 2009 on decreased enrollments:

   “We expect this year’s revenue growth in public and senior business to continue to more than offset the potential for further pressure from the employer market,” UnitedHealth CEO Stephen J. Hemsley said in a conference call with analysts.

   Further, VA hospitals (a government-run single payer system) consistently outperform private hospitals. (Washington Post)

   In other words, Mr. Prager, it isn’t the GOVERNMENT that’s running Medicare and Medicaid into the ground. It’s the for-profit insurance companies whose profits are earned on the backs of American taxpayers.

2. Question 2: [Re: Pre-existing conditions exclusions] But if any individual can buy health insurance at any time, why would anyone buy health insurance while healthy? … The whole point of insurance is that the healthy buy it and thereby provide the funds to pay for the sick.

   Answer: This is why there is a distinction made between “access to health care” and “health insurance”. To be clear: Health benefits are a risk pool. They are not “insurance” like car insurance or life insurance. The premise behind life insurance is that an insured will live long enough that the premiums paid will cover the pure cost of providing insurance. The premise behind auto insurance is that drivers won’t have car accidents, but if they do, the insurance company will cover the damages attributable to their insured. If drivers don’t have accidents, the company wins. If drivers do have accidents, the company has the option to drop them or assign them to a more expensive risk pool. Now that auto insurance is mandatory in many states, however, all drivers must have access to insurance, and so state-mandated high-risk policies are available and required to be carried by high-risk drivers at, yes, a higher cost to them.

   Health insurance is entirely different. It is implicit that everyone will need health care at some point. The best outcome there is: a risk pool diverse enough so that premiums paid will cover benefits due in any given year. To raise their profit margins, insurers ‘purify the risk pool’ by denying coverage to anyone who might possibly develop a condition requiring treatment. By purifying the risk pool, claims are lowered and profits rise, which makes a healthy balance sheet and an unhealthy population.

   It is a fact that without health benefits, people avoid seeking treatment for conditions which, when untreated, can become life-threatening conditions. Preventive medicine is a cost-saving measure which is included as part of the House health care reform act and which benefits our society as a whole. Excluding people from access to health benefits because they have a pre-existing condition forecloses preventive care,  guarantees that at some point they will turn to the government for assistance because there is nowhere else to turn, and they will do so at the point where treatment costs are most expensive.

3. Question 3: “Why do supporters of nationalized medicine so often substitute the word “care” for the word “insurance?” it is patently untrue that millions of Americans do not receive health care. Millions of Americans do not have health insurance but virtually every American (and non-American on American soil) receives health care. ”

   Answer: See my answer to Question 2. It is somewhat disingenous to suggest that the government can’t manage health care benefits and then turn around and claim that everyone ultimately has access to health care. Anyone who has faced a serious illness, injury or condition which requires hospitalization, surgery, or chronic illness care knows that they only receive health care at the risk of losing everything they have worked for, including their home, their job, their savings and their livelihood.

4. Question 4: “No one denies that in order to come close to staying within its budget health care will be rationed. But what is the moral justification of having the state decide what medical care to ration? ”

   Answer Health care is rationed now. Some people get it and others don’t. The ones who don’t are the ones with pre-existing conditions, the middle class, the self-employed, and the unemployed who cannot afford COBRA continuation benefits. Those who decide the rationing process are the for-profit insurers, who make their decisions based upon their balance sheets, rather than any moral, medical or social good. What Mr. Prager is asking us to accept is that corporations who have a duty to make a profit and distribute those profits to their shareholders will somehow make medical care decisions which are morally superior to public servants whose only duty is to the people they serve.

5. Question 5: “Given how many lives — in America and throughout the world – American pharmaceutical companies save, and given how expensive it is to develop any new drug, will the price controls on drugs envisaged in the Democrats’ bill improve or impair Americans’ health?”

   Answer: Given that the price controls relate to established medications which have gone long past the patent expiration and are available as generics, it would appear that this argument is moot. Further, the price controls on drugs are controls agreed to by the pharmaceutical industry.

   Finally, Medicare is currently prohibited from negotiating drug prices under Medicare Part D, that ‘reform’ passed by the Republican Congress under George W. Bush’s watch, which has caused the costs of the Part D benefit to balloon in the past 5 years to double the original CBO score.

6. Question 6: “Do you really believe that private insurance could survive a “public option”? Or is this really a cover for the ideal of single-payer medical care?”

   Answer: This is the heart of the argument at last. Even insurance companies agree that everyone should be covered and pre-existing conditions exclusions should go away. However, they want that captive group — the 47 million uninsured who will now be required to buy insurance. Introduction of a public option means they cannot operate in a monopolistic fashion. They will have to compete.

   As demonstrated with Medicare Advantage plans, insurers have figured out how to be profitable and compete, provided they receive government subsidies. Administrative costs in private insurers’ plans are twice the cost of public Medicare costs. Insurance companies “save” by excluding those who might be a risk.

   One possibility for profit margins: Split the company. Make the company providing the basic benefits a not-for-profit company, and offer insurance through a for-profit company for ‘luxury benefits’. Insureds could hold policies with both. That’s just one idea. Trust me on this. Insurance companies always find ways to make profits. I have yet to see one who hasn’t. It just means they’re not quite as in control of things as they were before. Now they have a true competitor in the same market, something that has been sorely lacking.

7. Question 7: Why will hospitals, doctors, and pharmaceutical companies do nearly as superb a job as they now do if their reimbursement from the government will be severely cut? Haven’t the laws of human behavior and common sense been repealed here in arguing that while doctors, hospitals and drug companies will make significantly less money they will continue to provide the same level of uniquely excellent care?

   Answer: Hospitals and pharmaceutical companies have agreed to these cuts, and have participated in the process and the dialogue. Presumably they have done so because they expect to benefit in other ways. As for doctors, it’s my understanding that there are still some open issues on how they will be compensated and what “outcomes-based” medicine means in terms of the final health care reform bill. I do think this question is valid and deserves a more specific answer, which may be forthcoming as the bills are reconciled in committee.

8. Question 8: Given how many needless procedures are ordered to avoid medical lawsuits and how much money doctors spend on medical malpractice insurance, shouldn’t any meaningful “reform” of health care provide some remedy for frivolous malpractice lawsuits?

   Answer: Tort reform applies to many areas. Health care is only one. Shouldn’t tort reform be tackled as its own reform dealing with the different areas it touches upon, particularly given the coordination with state law?

9. Question 9: “Given how weak the U.S. economy is, given how weak the U.S. dollar is, and given how much in debt the U.S. is in, why would anyone seek to have the U.S. spend another trillion dollars? Even if all the other questions here had legitimate answers, wouldn’t the state of the U.S. economy alone argue against national health care at this time? ”

   Answer: No. There is no question that the health of the economy is inextricably tied to the health of the population. Further, no one is proposing the expenditure of one trillion dollars. The President has said over and over again that he will not sign anything into law that is not deficit-neutral.

10. Question 10: Contrary to the assertion of President Obama — “we spend much more on health care than any other nation but aren’t any healthier for it” — we are healthier. We wait far less time for procedures and surgeries. Our life expectancy with virtually any major disease is longer. And if you do not count deaths from violent crime and automobile accidents, we also have the longest life expectancy. Do you think a government takeover of American medicine will enable this medical excellence to continue?

    Answer: Mr. Prager is basing his assertion on what facts? These are the facts I see:

    1. In 2008, the US ranked last in rankings focused on preventable deaths due to treatable conditions.
    2. The US ranks last or next-to-last on a five-point ranking system of performance: quality, access, efficiency, equity, and healthy lives. It also shows a lag in adoption of IT and use of nurses for care coordination of chronic diseases. (Commonwealth Fund)
    3. The US performs best on preventive care, if patients have access to it. (Commonwealth Fund) See also the Kaiser Foundation report on Health Care and the Middle Class: More Costs and Less Coverage

    The facts point to the truth of President Obama’s assertion. Waiting less time for procedures and surgeries is only good if one has access to the procedures and surgeries. 47 million people don’t. Our life expectancy with any major disease is not necessarily longer, nor is the quality of life better. The problem is not with the practitioners of medicine in the US. The problem is getting access to practitioners.

A pattern and a message emerge from Mr. Prager’s questions. What they are intended to suggest to the reader is that we live in some kind of utopia where we have the best health care available, delivered by the best system in the world. In fact, we have great practitioners, but a growing group of the population has no access to those practitioners. If I had a dime for every person I’ve heard tell me they’re afraid they have some disease or condition but can’t go to the doctor because they don’t have health insurance, I’d have enough money to pay my COBRA continuation premiums for the rest of my life.

Mr. Prager is playing ‘head in the sand’ argumentation. I truly believe that he believes that if we close our eyes and say over and over “there’s no place better than the US”, our health care system will magically improve. The truth is different. Until we face the issues head-on and deal with them, with the understanding that there are just some things government really CAN do better than private enterprise, our economy and our health will continue to suffer.

¹ A term I object to since it politicizes a discussion which should be non-partisan and rationally addressed. Health care is an issue that affects each and every one of us, Republican or Democrat.

Updated post at 3:11pm to include VA reference and Medicare Part D reference

Single Payer – Not necessarily socialized medicine. Not even necessarily the government. Just means one set of uniform paper work to one entity with common standards. Could be very efficient.Would certainly drive costs down for providers, who wouldn’t have to employ nine clerical workers for one professional, just to bill insurance companies and collect. Could make claims processing faster, too. Would not necessarily change your choice of provider. Remember: the payer is not the provider.

Public Option – A plan run by an entity like Medicare, which could take all the people who couldn’t afford or get into private plans. Not necessarily cheaper, or worse. But a way to guarantee health care for people who can’t afford it. Doesn’t make paperwork more efficient, but gives people with pre-existing conditions or no employer a place to get affordable insurance.

Rationing – What we all think of when we think single payer or public option. But in actuality, what we have now in America, where if you can’t afford or qualify for insurance, you don’t get care. We have more “effective” rationing of health care in America than any other developed country. It’s just not rational rationing. Rational rationing involves letting the sickest go first, or the ones with the best future potential. In America, the old and the rich go first. Also the extremely poor. The middle goes last.

Pre-existing conditions – the way we ration now. Back problems, depression, asthma, epilepsy, diabetes, high blood pressure, arthritis are some of the most common pre-existing conditions. Let’s not even talk about cancer.

By age 50, most Americans have one of them, and many Americans have as many as three. Pre-existing conditions are used by insurance companies to stop people from qualifying for health insurance, or to limit the insurance to exclude pre-existing conditions (a “rider” attached to a policy), or to make the cost of insurance so high that entire families go bare.

Employer-sponsored coverage – this is what we have (had) now, which most uninformed people want to protect. What “low information voters” don’t realize, is that 1) the cost of health insurance is part of what drove GM into bankruptcy, and makes large employers so anxious to lay people off whenever the economy hiccups 2)that’s one thing that makes the cost of American goods more expensive than those produced elsewhere and has forced manufacturing offshore; 3)small employers are trying to duck it like the plague, because the cost of insurance makes hiring too costly for them.

Who likes employer-sponsored coverage? The health insurance industry, because it has found the deepest pockets to shift the costs to. Who doesn’t like it? Any small business. Anyone who works in a small business. Anyone who is laid off. Anyone who works for him/herself.

Now. Armed with this information, imagine yourself laid off, or with a
pre-existing condition and wanting to work for a small company, or
self-employed. What do YOU think you would want?

Sometimes it’s necessary to walk a mile in the other person’s mocassins, folks.

I don’t have a dog in this hunt, because I’m on Medicare, which is single payer. But I know what it’s like to be over 50 in a small business (my own) with employees I cared about and a hip that needed replacing. I never told anyone about it because I didn’t want a pre-existing condition to raise our rates. As a result, I was bone-on-bone in pain when I reached age 65, and collapsed in a heap in the orthopedic surgeon’s office, thanking God for Medicare.