San Jose Mercury News, August 27, 2009
At a recent town hall meeting in New Hampshire, President Barack Obama promised that health care reform will not threaten private insurance coverage. “If you like your health care plan, you can keep your health care plan,” he said. “This is not about putting the government in charge of your health insurance.”
Most Americans approve of their current health insurance plan. And a just-released poll revealed that 57 percent of voters oppose a government-run, single-payer health plan.
But the president’s rhetoric doesn’t match the reality of his proposals. In fact, he and congressional Democrats have designed their reform proposals to put the government in charge of Americans’ health care — albeit gradually.
The first order of business for Democrats is to create a government-run “public option” to compete against private insurers. Proponents claim it will give patients more choices and keep the private market “honest.”
Many have chafed at the notion of a government-owned and government-operated entity throwing its weight around the private health sector. Some senators have called for an alternative of government-sponsored and government-funded nonprofit insurance cooperatives. Details are slim, but essentially, these co-ops would adhere to federal standards regarding benefits and collectively negotiate rates with health care providers.
In either case, the competition would be rigged. The government already referees the private insurance market. A public option or government-funded co-op would make it a player in the game, too. Both could offer plans at artificially low prices and operate without any risk of going bankrupt, thanks to their direct line to the federal treasury.
The result would be a steady crowding-out of private insurers, eventually leaving America with a de facto single-payer health system.
Here’s how:. A public option would likely reimburse health care providers at below-market rates, just as existing public insurance programs do. Medicaid, for instance, underpays doctors and hospitals by 43 percent and 33 percent, respectively.
Routine underpayment by the government increases the price of private insurance, as doctors and hospitals charge privately insured patients more to make up for losses incurred by treating publicly insured ones. Such cost-shifting increases private premiums by 15 percent.
A new public option will have the same power to push up the prices of its competitors. As private insurance becomes prohibitively expensive, many firms will stop covering their employees. Ultimately, Americans will be forced to “choose” the government option because it’s cheaper or because it’s the only option left.
Health reform architects know this. In October 2003, when the president was running for the Senate, he told a crowd, “I happen to be a proponent of a single-payer, universal health care plan. But as all of you know, we may not get there immediately.”
Now that he’s president, Obama has publicly changed his tune. Whether he still views the public option as a gateway to single-payer is unclear. But the mastermind of the public option proposal, University of California-Berkeley political scientist Jacob Hacker, certainly does.
Hacker said of the public option in 2008, “Someone told me this was a Trojan horse for single-payer. Well, it’s not a Trojan horse, right? It’s just right there. I’m telling you. We’re going to get there, over time “… but we’ll do it in a way that we’re not going to frighten people into thinking they’re going to lose their private insurance.”
It’s time for Democrats to be straight with the American people about health care reform. Whether they’re willing to admit, they are paving the way for government-run health care. That’s certainly not what the American people want.
SALLY C. PIPES is president and CEO of the Pacific Research Institute. She wrote this article for the Mercury News.