I will defer to the brilliant Robert Reich who I think gives a strong case
Why We Need a Public Health-Care Plan
Without the government as competition, the private sector has little incentive to improve.


By ROBERT B. REICH

Why has health-care reform stalled in Congress? Democrats, after all, control both Houses, and President Obama, whose popularity remains high, has made universal health care his No. 1 priority. What's more, an overwhelming majority of the public wants it. In the most recent Wall Street Journal/NBC News poll, 76% of respondents said it was important that Americans have a choice between a public and private health-insurance plan. In last week's New York Times/CBSNews poll, 85% said they wanted major health-care reforms.

So why the stall? Mainly because Congress can't decide how to pay for it. The hardest blow came last week when the Congressional Budget Office (CBO) estimated that the trial-balloon bill emerging from the Senate Health Committee would cost a whopping $1 trillion over 10 years and would cover only a fraction of Americans currently without health care. According to the CBO, another tentative bill, this one coming out of the Senate Finance Committee, would cost even more -- $1.6 trillion.

That spells political trouble. Republicans who never batted an eye over George W. Bush's wild spending habits have become born-again fiscal hawks. Blue Dog Democrats are nervous about mounting deficits. Even the president admits that the flow of red ink in future budgets keeps him up at night.
[Commentary] Corbis

No one wants to raise taxes or even be accused of thinking about the subject. But honest politicians have to admit that universal health care will require additional revenues. The likeliest sources are limits on certain tax deductions and a cap on tax-free employer-provided health care. Would the public go along? The most intriguing finding in last week's New York Times/CBS poll was that most respondents said they would be willing to pay higher taxes to ensure everyone had health insurance.

But before we even get to this point, it's important to recognize that those terrifying CBO cost projections significantly overstate the costs. They did not include potential cost savings from the lynchpin of health-care cost containment: a so-called public option that would give people who don't get health care from their employer the choice of a public insurance plan. Why? For the simple reason that the Senate committees hadn't yet agreed on a public option. Yet without a public option, the other parties that comprise America's non-system of health care -- private insurers, doctors, hospitals, drug companies, and medical suppliers -- have little or no incentive to supply high-quality care at a lower cost than they do now.

Which is precisely why the public option has become such a lightening rod. The American Medical Association is dead-set against it, Big Pharma rejects it out of hand, and the biggest insurance companies won't consider it. No other issue in the current health-care debate is as fiercely opposed by the medical establishment and their lobbies now swarming over Capitol Hill. Of course, they don't want it. A public option would squeeze their profits and force them to undertake major reforms. That's the whole point.

Critics say the public option is really a Trojan horse for a government takeover of all of health insurance. But nothing could be further from the truth. It's an option. No one has to choose it. Individuals and families will merely be invited to compare costs and outcomes. Presumably they will choose the public plan only if it offers them and their families the best deal -- more and better health care for less.

Private insurers say a public option would have an unfair advantage in achieving this goal. Being the one public plan, it will have large economies of scale that will enable it to negotiate more favorable terms with pharmaceutical companies and other providers. But why, exactly, is this unfair? Isn't the whole point of cost containment to provide the public with health care on more favorable terms? If the public plan negotiates better terms -- thereby demonstrating that drug companies and other providers can meet them -- private plans could seek similar deals.

But, say the critics, the public plan starts off with an unfair advantage because it's likely to have lower administrative costs. That may be true -- Medicare's administrative costs per enrollee are a small fraction of typical private insurance costs -- but here again, why exactly is this unfair? Isn't one of the goals of health-care cost containment to lower administrative costs? If the public option pushes private plans to trim their bureaucracies and become more efficient, that's fine.

Critics complain that a public plan has an inherent advantage over private plans because the public won't have to show profits. But plenty of private plans are already not-for-profit. And if nonprofit plans can offer high-quality health care more cheaply than for-profit plans, why should for-profit plans be coddled? The public plan would merely force profit-making private plans to take whatever steps were necessary to become more competitive. Once again, that's a plus.

Critics charge that the public plan will be subsidized by the government. Here they have their facts wrong. Under every plan that's being discussed on Capitol Hill, subsidies go to individuals and families who need them in order to afford health care, not to a public plan. Individuals and families use the subsidies to shop for the best care they can find. They're free to choose the public plan, but that's only one option. They could take their subsidy and buy a private plan just as easily. Legislation should also make crystal clear that the public plan, for its part, may not dip into general revenues to cover its costs. It must pay for itself. And any government entity that oversees the health-insurance pool or acts as referee in setting ground rules for all plans must not favor the public plan.

Finally, critics say that because of its breadth and national reach, the public plan will be able to collect and analyze patient information on a large scale to discover the best ways to improve care. The public plan might even allow clinicians who form accountable-care organizations to keep a portion of the savings they generate. Those opposed to a public option ask how private plans can ever compete with all this. The answer is they can and should. It's the only way we have a prayer of taming health-care costs. But here's some good news for the private plans. The information gleaned by the public plan about best practices will be made available to the private plans as they try to achieve the same or better outputs.

As a practical matter, the choice people make between private plans and a public one is likely to function as a check on both. Such competition will encourage private plans to do better -- offering more value at less cost. At the same time, it will encourage the public plan to be as flexible as possible. In this way, private and public plans will offer one another benchmarks of what's possible and desirable.

Mr. Obama says he wants a public plan. But the strength of the opposition to it, along with his own commitment to making the emerging bill "bipartisan," is leading toward some oddball compromises. One would substitute nonprofit health insurance cooperatives for a public plan. But such cooperatives would lack the scale and authority to negotiate lower rates with drug companies and other providers, collect wide data on outcomes, or effect major change in the system.

Another emerging compromise is to hold off on a public option altogether unless or until private insurers fail to meet some targets for expanding coverage and lowering health-care costs years from now. But without a public option from the start, private insurers won't have the incentives or system-wide model they need to reach these targets. And in politics, years from now usually means never.

To get health care moving again in Congress, the president will have to be clear about how to deal with its costs and whether and how a public plan is to be included as an option. The two are intimately related. Enough talk. He should come out swinging for the public option.

Mr. Reich, professor of public policy at the University of California at Berkeley and former Secretary of Labor under President Clinton, is the author of "Supercapitalism: The Transformation of Business, Democracy, and Everyday Life" (Alfred A. Knopf,

Only because universal single payer (USP) is not on the table. USP is the only real reform. The problem with healthcare is not only the gouging and manipulations by the insurance industry but that price is greatly inflated in a system of healthcare for the highest bidder. Public option does bring in competition but it does not eliminate it. Competition against the government will not bring the prices down as far as it could or should be if the health care providers will choose the highest payers as a priority for giving care over lower payers. The result is that government coverage costs will be inflated upwards rather than bring costs in general down. More taxes would be needed for the government to compete. There will always be those willing and able to pay more to get on the front of the line. Healthcare is an essential and should not be elevated to the status of a luxury or status system. USP removes the useless insurance industry profit margin altogether that drives the price for America to twice that of other nations without providing as much as a band aid. Only when everyone relies on the same system on an equal basis will everyone have the same reliance and need in making it work and work well. Capitalism only exists if the competition is perfect, that is so many producers that none of them can exert any pressure or influence on the supply and thus the price relationship. That is not existent where there are monopolies. Prices are inflated when supply is withheld below the actual need. It is also inflated when providers pad the services by unnecessary procedures and surgeries too. Providers should not be compensated by the procedures and surgeries they perform but rather on the basis of the number of patients they treat and the cure rate. That way they can’t pad the costs for the sake of profits and thus the incentive to pad is removed. Healthcare it too scarce and that does not make the insurance industry or the providers compete, it makes the consumer compete with higher prices.

Gram, I am for a public option. With-out a not-for-profit choice and appropriate regulations, insurance companies will continue to strong arm us and keep on raising the costs while lowering the quality of coverage available.

There are 47,000,000 people without coverage in this Country and 45,000 of them are dying needlessly every year because they have no health coverage. We are the richest Country in the world and this is a crime.

83% of the people seeking out medical treatment at free clinics around the Country are employed. They have jobs but can't afford health insurance or it is no longer offered through their employer.

Personally I used to pay $453 per month back in 2001 for a family plan that had a $1000 deductible and $10-$15 co-pays. Seemed pretty reasonable. Today I pay $953.18 per month with a $1500 deductible and $25-$50 co-pays. This is an increase of more than 130% in 8 years. Oh yes, certain doctors, labs and procedures are not covered. Did you know that Anesthesiologists are doctors? Yes, well they are and in many cases not covered and that a blood test to evaluate a person for high cholesterol and diabetes as part of a physical is lab work and may not be covered? This huge increase has made health insurance unsustainable for us and we will have to drop our health insurance in January and be added to the list of 47,000,000 uninsured in this great Country.

Myth: socialism. Some people say a public option is socialist but this is incorrect. If it was a socialist based plan, everyone would HAVE to use the public option and everyone would be afforded the same benefits. A public option allows us to keep our current insurance plan if we are happy with it but gives us a choice if we can't afford our current plan or have none.

Myth: takeover. A public option does not mean a government takeover of health care, it just means we will have a not-for-profit choice. In my opinion health care should have never been a FOR PROFIT business. People making money by denying other people treatment? This is the "fox watching the hen house" scenario.

Another myth is that a public option will put private insurers out of business. Here are a couple of examples of why this is not true:
1. The government ships packages as the United States Post Office but did it take over the shipping industry? No, it "competes" with UPS and Fed/EX. In fact, the private carriers are doing better than the USPS because there are so many people using e-mail now vs sending letters.
2. The government runs public schools but did it take over institutionalized learning? No, it "competes" with private schools, academies and colleges.

A public option provides competition in these areas and is necessary to maintain fair and balanced opportunities.

It swirls my brain that health care for the people of the United States of America aka: the citizens, the work force, the employees and at the same time the employers of the United States of America, is not overwhelmingly promoted by Congress. I thought the Constitution said something about promoting the general welfare to ourselves and our prosperity. We are the taxpayers and should be offered a fair opportunity to care for ourselves and our families. We are not looking for a free ride. We want to contribute to a public option and pay our way. We just believe that with a not-for-profit public option moderating costs, we would be able to afford health insurance while contributing much more toward stimulating the economy and the Country.