According to last week's Washington Post, the public option is the "crux" of the health-reform debate and the "greatest challenge" for Senate negotiators to overcome. That's an accurate description of the current political scene, but it's true only because so many people, including members of Congress, are responding ideologically to the idea of government involvement.
The public option is not the biggest question in reform. Under the proposals being considered, it would be offered only within insurance exchanges at the state and regional level. The far bigger question is how those exchanges work:
Are they open to all employers and individuals -- required, in fact, for employers below a given size -- or open only to the individual and small-group market?
Do the exchanges have the power to risk-adjust the premiums paid to health plans?
Can they regulate the marketing strategies and benefit designs of private insurers?
The public plan will likely end up as a dumping ground for high-cost, mostly low-income people if the exchanges are open only to the individual and small-group market and have inadequate power to risk-adjust premiums or to regulate private insurers' marketing and benefit design.
In other words, we could get a public plan that instead of "disciplining" private insurers, as the president said last week, actually buttresses their dominance of the system. Watch what you wish for.
Tuesday, June 30, 2009
Paul Starr on the Public Option
I'm not alone suggesting the Public Option may turn out to be a dumping ground as Starr puts it,