The Best Way to Save Obamacare - The New York Times
Comment by Don McCanne
Jacob Hacker deeply believes in a better America for all of us. As a political scientist,
he understands the difficulties of moving the process in that direction.
During the health care reform process, he recognized the lack of
political feasibility of enacting a single payer Medicare for all
program, but, with good reason, he decided that a public option -
offering the option to purchase Medicare instead of private insurance -
was feasible. In fact, it almost happened. Since so many problems still
exist six years after enactment of the Affordable Care Act (ACA), we
should listen to Jacob Hacker to see what he has to recommend.
First, let’s go back and look at the process that led up to ACA. The
dysfunction in our system had become unbearable - runaway costs, too
many uninsured and underinsured, preventable financial hardship and
physical suffering continued - something had to be done. The policy and
political communities understood the superiority of single payer
Medicare for all, but the politics were polarized. It was decided that
the feasible approach would be for the Democrats, who were in control,
to lead by supporting the Republican proposal of building on the
existing system. Although the progressive community initially was
disappointed, they decided that the only feasible approach was to join
the (ACA) bandwagon, especially when it included the public option that
many thought would eventually transform into a single payer system once
the public realized how much better government insurance was compared to
private insurance. Although the process emasculated the public option,
one Senator was able to block it altogether.
Fast forward to today. After six years, the feasible approach has not turned
out so well. Yes, many more now are covered, but little realized how
much insurers could still innovate, for their own benefit, in a more
regulated environment. To make premiums affordable, plans had to be
offered with a lower actuarial value - accomplished by increasing the
deductibles and offering credits and subsidies for lower income
individuals (which left middle income individuals more exposed to
medical debt). But many did not realize the rapidity and intensity with
which the insurers would jack up the deductibles. And now the policy of
high deductibles is corrupting the part of the market they were trying
to protect - the employer-sponsored plans. Also they wanted to protect
the “gains” of managed care, which really is not much more than
negotiating lower rates for provider panels in exchange for granting
them exclusivity. Once again, most did not anticipate the rapid move to
ultra-narrow networks that serve the insurers so well while impairing
access for their enrollees. Higher deductibles and narrow networks can
hardly be described as successes of ACA since most people are worse off.
So now we are again facing the same political dilemma. Do we embark on a
process to establish single payer Medicare for all, or do we take the
politically feasible route of enacting a public option which would fix
our system by requiring private insurers to complete with a vastly
superior public plan, or so they would have us believe? Well, the
decision has already been made. The progressive community is already
totally on board with the public option. The tragedy is not so much that
on this path we will end up with a public plan that will be only one
more feeble player in the dysfunctional market of private plans, but
rather that we will, once again, have walked away from single payer,
perhaps for decades, because of this meme about lack of political
feasibility.
So let’s look more closely at what Jacob Hacker has to offer in his truly sincere effort to cure our health care system.
* From the outset, I’ve argued that without a public option — a Medicare-like
plan that would be available to all Americans buying health insurance —
insurance competition would dwindle and premiums would skyrocket.
The insurance industry’s control of Congress would prevent a public option
that could out-compete the private plans. Our traditional Medicare
program is already being out-competed by the private Medicare Advantage
plans because Congress has continued to support policies that give the
private plans an unfair advantage while rejecting measures that would
provide the much-needed expansions in the currently deficient package of
Medicare benefits. That’s why Medicare must be improved before we
consider it as a program for all of us.
* Critics of the public option are convinced it’s a one-way ticket to single
payer (the government alone provides coverage). History suggests the
opposite.
Currently we are being inundated with threats from the conservatives that if
we enact a public option it will lead to the left’s dream of a single payer system.
Yet the progressives have jumped on board precisely because they believe a
public option will lead to their dream of a single payer system. Yet
Hacker now says that history suggests the opposite. He says that the
public option is not a threat to a system of competing private plans.
Will the progressives really be satisfied with perpetuation of the
current dysfunctional system as long as the few who buy their plans
through the exchanges will be able to choose a feeble public option?
* We’re already heading toward single payer in sections of the nation — only
it’s a private plan doing the paying. Next year, five states will have
only one insurer in their exchanges.
Yes, so many plans have pulled out that there is only one private insurer
left in many of the exchanges. But it is sad to see Hacker characterize
these lonely private plans as single payer when the highly dysfunctional
multi-payer system remains in place. He understands the single payer
model better than most, yet his passion for the public option model
drives him to play rhetorical games that glibly dismiss the true meaning
of single payer (though he may actually be threatening the
conservatives with this bastardized form of “single payer”).
* The diminishing number of choices doesn’t just hurt consumers; it also
makes it harder for regulators to use antitrust tools to push back
against this consolidation.
Politicians and the policy community are fixated on market competition as a means of
controlling costs, yet Nobel laureate Kenneth Arrow half a century ago
explained to us how markets do not work in health care. The United
States has relied more on markets than other nations and we have the
highest costs that has only brought us mediocrity. A publicly
administered single payer system is much more effective at controlling
costs throughout the system.
* A public plan is attractive in part because it can offer a broader network of providers.
Can it? Since the public option is just another player in a market of
private plans, it would be funded by premiums rather than taxes. As the
provider panels are increased the premiums would have to be increased
since they can no longer offer exclusivity, making the public option
less competitive, not to mention that broader panels would be attractive
to patients with greater needs. Death spiral?
* Medicare has pioneered innovations in reimbursement, and it has improved
hospital quality by imposing new penalties for readmissions. A public
option could build on these breakthroughs and extend them to Americans
under Medicare age.
Current Medicare innovations such as ACOs, MACRA, MIPS, and APMs have not proven to be
very effective and are causing grief amongst the health care
professionals. Besides, private insurers also adopt Medicare
innovations, but only those that have been proven to be effective.
* The biggest advantage of the public plan, however, is its greater ability to restrain prices.
If the differential between public and private prices is too great,
providers will reject the public programs in favor of the private. Many
physicians will not accept Medicaid payments because of the low payment
rates, especially specialists. Having a ticket to a public option is not
very helpful if there is no one there to care for you.
* Pressure from a coalition of left-leaning groups led by the Progressive Change
Campaign Committee (a group that fought for the public option in 2009)
has encouraged 33 Senate Democrats, including the party’s leadership, to
call for a public option. President Obama has started advocating for it
again, and Hillary Clinton has embraced it.
Point made on the contention that the progressives are jumping on board.
* This year, Senate Republicans, providing another lesson, passed legislation
that repealed the Affordable Care Act through the budget process, which
isn’t subject to a filibuster. (President Obama vetoed it.) If that’s
possible under the budget rules, creating a public option should be,
too.
If a public option can pass only by squeaking it through in the reconciliation process, that doesn’t say
much for expecting broad support in a divided Congress and a divided
nation.
* If things keep going as they are, Americans are certain to demand greater regulation of private plans to make them operate more like public plans. Instead, we should make them
compete with a public option.
Uwe Reinhardt has frequently said that a system of competing private plans - like
they have in Switzerland - can work if they are very heavily regulated.
Yet an OECD/WHO report on the Swiss system revealed that they still have
many of the problems that we have in the United States. So keeping
private plans in the system is still a problem. Instead of making them
compete with a public option, we should get rid of them and establish
our own single public plan.
Feasible? Is it really better to just give up and perpetuate uninsurance,
underinsurance, high costs, high deductibles, narrow networks,
inequities, financial hardships, impaired access, and more physical
suffering and even deaths? What’s not feasible about trading all that in
for a system that works?
Like a few other states, Colorado has a ballot initiative process to bring questions directly to voters. Proponents of a universal system gathered 156,000 signatures—more than enough for the initiative to appear on the ballot—in support of adding what's known locally as Amendment 69 to the ballot. If passed, the measure would add a 12-page amendment to the state's constitution and create 
ColoradoCare proponents see health care as a fundamental right, like education and fire protection. They believe the system would reduce the overall amount Coloradans spend on health care, while improving quality and providing coverage for everyone. The system's backers estimate that 80 percent of Coloradans will pay less under ColoradoCare.
Health care is a large piece of the benefits industry, and benefits brokers and agents in Colorado, and around the country, are keeping a close eye on Amendment 69 this election season.