By Daniel Bryant for Bangor Daily News
Public option health plans have been much in the news of late. Defined as health care coverage plans offered to individuals by the government and paid for by premiums and tax-funded government subsidies and credits, they are designed as alternatives to single-payer plans, which would replace our present multi-payer system with a publicly funded comprehensive health care plan for everyone. Public options appeal to many centrist politicians because they represent choice, and promise not to disrupt our present system.
Many observers, however, feel that the primary goal of health care reform is to address problems with our current system and that public options fail to do that. Here are several examples of why.
Access: Most Americans feel that everyone should have access to good health care. There is no guarantee that a public option would do that, or expectation that existing “thin” plans would be improved. A single-payer plan funds good health care equally for everyone.
Health expenditures: As just one of many commercial, state, and federal plans, a public option cannot achieve the large-scale cost controls of a single-payer plan (provider and drug price negotiation, global hospital budgets, overhead reduction, bulk purchasing, etc.).
Waste: All the waste of our present system ( over $500 billion a year) would remain with an added public option. There would be duplication of competing plans with their own sets of benefits, eligibility requirements, and individualized premiums requiring sophisticated provider billing departments and a public option would not address run-away drug prices.
Cost: To make premiums low enough that people with individual or employment-based plans will switch to a public option, subsidies and tax credits would need to be generous. Because, savings will be few with public options, those funding their own health care individually or through work will have to pay additional taxes to fund others’ care. In addition, absent savings, benefits such as eye, hearing, and dental care could not be added to a public option plan without increasing taxes.
Point of service costs: Unlike the situation in single-payer plans, public options will still entail cost sharing (out-of-pocket expenses, deductibles), which have been shown to discourage care.
Complexity: Only the most sophisticated of health care consumers will be able to compare a new public option to their existing options and choose wisely.
Business burdens: Businesses that offer a health insurance benefit will find benefit management yet more complicated, and worker morale harder to maintain.
Job lock: Workers, in the case where their company chooses the public option and largely funds it, would still be victims of the job lock that keeps workers in a job for fear of losing their health care benefits.
Provider costs: With public options, provider and hospital billing departments will still have to deal with uncompensated care and collections, and will have their work further complicated by the addition of yet another payer. With single-payer plans, all bills would be paid; and billing costs would be greatly reduced from the current 20 percent of the budget.
Choice of provider: The number of providers participating in a public option will depend on the generosity of reimbursements, which requires generous funding. Therefore, the choice of providers may be limited. In a single-payer plan, thanks to reduced provider overhead and major savings system-wide, most providers would see little change in net income and would therefore participate.
In summary, public options not only do not address many of the problems in our multi-payer health care system, they actually aggravate them.