Public option likely to be managed by private insurance company

By John Byrne
Saturday, October 24th, 2009 -- 7:31 am
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healthcare Public option likely to be managed by private insurance companyA little-noticed tidbit in Saturday's Washington Post is sure to raise eyebrows among liberal supporters of a gorvernment-run healthcare plan: the plan is likely to be administered by a private insurance company, the very companies that progressive activists are trying to unseat.

The public-option debate is frustrating some Democrats, who have come to believe that a government-run plan is neither as radical as its conservative critics have portrayed, nor as important as its liberal supporters contend. Any public plan is likely to have a relatively narrow scope, as it would be offered only to people who don't have access to coverage through an employer.

The public option would effectively be just another insurance plan offered on the open market. It would likely be administered by a private insurance provider, charging premiums and copayments like any other policy. In an early estimate of the House bill, the Congressional Budget Office forecast that fewer than 12 million people would buy insurance through the government plan.

Supporters of the public plan contend that it will help to trim healthcare costs, as a public insurer wouldn't need to generate profits. Health insurance companies typically earn profits of around two to four percent, which amounts to billions of dollars for some firms.

A physicians' group notes that the bills authorize the government to contract with "corporations" that will create a "public option."

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"Both bills authorize the Secretary to contract with corporations to conduct unspecified activities that will somehow lead to the creation of an “option” program throughout the country," Kip Sullivan at Physicians for a National Health Program writes.

He continues:

Advocates of a “public option” claim that the “option” will look like Medicare. They say this about the “option” in both bills that have been introduced to date – the House “reform” bill, HR 3200, and the bill written by the Senate Health, Education, Labor and Pensions (HELP) committee. But this statement is not true.

Medicare is larger than any private insurance company; the “option” in both bills will be small. The traditional Medicare program is a single program with uniform benefits; the “option” in both bills will be a balkanized program that may not be available in all parts of the country. Medicare is administered by public employees; the “options” in both bills will be administered by private-sector corporations, some or all of which will be insurance companies. The “option” in neither bill resembles Medicare....

As the preceding rather convoluted description of MACs and contracting administrators suggests, neither the HELP bill nor HR 3200 makes it easy for readers to grasp that corporations, not public employees, will create, and probably run, the “option” program. Neither bill comes right out and says, “The Secretary shall hire private-sector corporations to create and run as many health insurance companies as is necessary to make health insurance available for sale to the non-elderly in each health insurance market in America.” Nor is that fact being ballyhooed by the bills’ authors and proponents. But it’s an important feature for “option” supporters to understand because it undermines the claim “option” advocates make over and over that the “option” will look like Medicare.

The Senate Health Committee bill includes a public option; the Senate Finance Committee bill does not. Senate Democrats are pushing to include an "opt-out" or "trigger" public health option in their final bill, which would unsettle some Democratic moderates but not to the point where they'd join a Republican filibuster.

In the House, Speaker Nancy Pelosi (D-CA) is whipping votes for a "robust" public option, to give negotiators between the two chambers leverage in order to have some form of the public option be included in a final bill.

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Story comments are below...
  • BigBearCO
    I am a liberal and I will never again support the Democratic Party if they don't get this right for the American people. Just open Medicare to all people...it's that simple. Anything less is a gift to the corrupt health insurance industry.
  • Caroline
    Am I the only one who thinks that letting insurance companies run the nation's health care would be like letting Tony Soprano run the EPA?

    Tony has vast experience in waste management, but his motivations and methods would worry me.
  • TBoy
    Calm down everyone - let's unknot those drawers. Private insurance companies have been running the Medicare system for years and years. They are called fiscal Intermediaries. They usually receive about 2.8%.

    Please let's all understand the way Medicare works before going off.
  • Savantster
    .
    According to this:

    www.pbs.org/newshour/health/medicare/wrm.html

    They [all the programs] are all "run" by government offices. Show me where "private companies have been running" Medicare (as opposed to providing the medical _services_ for medicare).

    Medicare is "insurance", it does not provide medical treatment, it pays for treatment from the private sector. The proposal from the bill looks like it will make the "public option" _insurance_ be "run" by "private companies", not government offices (like Medicare is).
  • Savantster
    .
    According to this:

    http://www.pbs.org/newshour/health/medicare/wrm...

    They [all the programs] are all "run" by government offices. Show me where "private companies have been running" Medicare (as opposed to providing the medical _services_ for medicare).

    Medicare is "insurance", it does not provide medical treatment, it pays for treatment from the private sector. The proposal from the bill looks like it will make the "public option" _insurance_ be "run" by "private companies", not government offices (like Medicare is).
  • lorn
    TBoy. Without respect or anything resembling good will, please immediately GFY!
    I would add that I hope you get sick and get to experience the failed joke of a medical system, but I am sure you are well insured and insulated from the suffering of millions of Americans.
    You disgust me!
  • papau
    Spot on - if I had read your comment I could have saved time and not made a comment. The two year contracts for each state that are put out for bid (every two years obviously) in my day were a major revenue - but not a major help for CEO salary or profit - at my company.
  • johnttt
    One step forward and two steps backward..............I'm a PROUD DEMOCRAT no question about that but things like this make you wonder what kind of crack Obama is smoking AND whose pipe he's smoking it from ......anyone with me on this one ?
  • trevinla
    simple answer - he is smoking the Health Insurance company's Crack from the Financial company's pipe
  • johnttt
    RIGHT !!!!!
  • malikk
    where is the change we were promised lol
    obama is a health industry house negro me i am a field negro i say fuck the health industry scumbags
  • socialismorbust
    Hey! Greedy Government! Here's a thought: Have the leader of the Canadian SINGLE-PAYER system come down and teach you how to run THAT?!?! DUH!

    Kucinich and Weiner have it right . But then why listen to them? After all, they don't take contributions from criminals or put profit and lobby money over PEOPLE!
  • trippin
    Fuck that. We already have that. It's called "Blue Cross."

    A lot of fucking good that did us.
  • trevinla
    It sounds like Goldman Sachs is getting into the Health Business now...
  • malikk
    where are the obama ass lickers today
  • trevinla
    Anyone who confuses the Obama who ran for President with the Obama who is the President is deluded

    The Democratic Party had better start figuring out who will run for President in 2012 because if Obama runs they will be defeated...
  • malikk
    i am a democrat and i hope the bastard looses, democrats dont deserve to be in power because there dont no what the fuck to do with power when there have it so fuck them
  • Max_1
    LOL...
    ... Like the G(no)P has their act together?

    p.s.
    Like the last 8 years were a freakin' success?

    Have you been asleep, or what?

    .
  • Savantster
    .
    being pissed about the Ds doesn't mean you support the Rs.

    I find it kind of disturbing how Americans can't seem to understand simple concepts.
  • Savantster
    .
    hogwash. They know exactly what to do with it.. and that's appease the people that give them money so they can run TV ads and stay in office.. They bow to their corporate masters, same as the Rs.

    What they fail to do is what they were elected to do, since the people elect, not companies. Companies are a tool for politicians, and the job they seem to want to do (so the tool they need) is raise money so they can run for office again.

    Money and the desire of more of it has corrupted our entire system, our entire lives.
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