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The Public Option Is Good Public Policy
By Georges C. Benjamin, MD, FACP, FACEP (E)
More than 46.3 million people went without health insurance coverage last year, and it’s getting worse. For many of us, the current health insurance system has never worked; remaining too costly or unavailable, even through our employer. In many parts of the country, the current system lacks competition between health plans having either only one or two companies, or having one company with an overwhelming share of the market. Consolidation of the health insurance industry coupled with an outdated antitrust exemption has given the industry enormous economic clout. The result has kept costs high and stifled the kind of competition that forces innovation in the battle for customers.
Lack of competition and inadequate regulation of the industry has allowed common practices like eliminating coverage for services, retroactive revocations and denials due to preexisting conditions that allow insurers to “cherry pick” the population and avoid the very people who need coverage the most. In a robust competitive environment, consumers and employers would not stand for these actions and would seek a better deal. At 18%, the health insurance industry’s administrative costs continue to gobble up the premium dollar. In contrast, Medicare, a public program, has administrative costs in the range of 3% to 6%. Preliminary estimates have shown a public option could save taxpayers billions of dollars over the long term.
There are those that argue that the public option would have an unfair advantage over the private plans. History, however, has shown that private insurers are far more resilient than we think, having successfully competed in the marketplace with Medicaid, Medicare, the Veterans Administration and self-insured employers. In many cases, private insurers are contracted to run all or part of public health insurance programs; a public/private partnership. Financially, the industry leaders made over $12 billion in profits last year. Other models of public/private competition exist in our nation that should give us comfort in this approach. Private schools successfully compete with public schools, and private mail services like UPS and Federal Express successfully compete with the U.S. Postal Service.
Private insurers should be forced to compete with a public plan on price, quality, innovation and customer service, thereby guaranteeing affordable choices in every community. It is sound public policy and should be included in the final legislation the president signs.
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The Best Prescription For Health Care Reform
By U.S. Sen. John Cornyn
This week the Senate Finance Committee held a key vote on health care reform, but more work remains to be done. Like most Texans, I believe that our health care system needs reform. Millions of families have seen the cost of their private insurance skyrocket. Many are worried about losing their coverage altogether. Seniors are concerned about the future of Medicare. Texans have told me that they want to keep the coverage they have, and don’t want Washington to make things even worse.
I believe health care reform should focus on lowering costs, which have more than doubled over the past decade. We can lower costs by realigning incentives for providers, so they focus on value instead of volume. We can create incentives for patients to make healthier choices. We can reform the private insurance market in every state to encourage greater competition and more choices, without denying anyone coverage because of a pre-existing condition. We can lower costs by cutting waste, fraud, and abuse in our current entitlement programs. And we can reduce costly defensive medicine by reforming our medical liability laws like we’ve done in Texas.
The bill we voted out of the Finance Committee, unfortunately, will only increase costs for everyone. The nonpartisan Congressional Budget Office said it will cost $829 billion, but when it’s fully implemented, the Senate Budget Committee estimates the real cost to be $1.8 trillion. Either way, it would still leave 25 million Americans uninsured, impose billions of dollars in new taxes and mandates, and cut more than $400 billion from Medicare. It would take away Medicare Advantage benefits from seniors, and make Medicaid the only option for 14 million Americans.
The bill also imposes hidden costs on states. The Texas Health and Human Services Commission estimates that the bill would cost Texas more than $20 billion over 10 years, and add 2.5 million Texans to Medicaid. That would mean billions in new state taxes, or draconian cuts in education, law enforcement, and other Texas priorities. According to one survey, 91 percent of Texans who buy insurance in the individual market will see their premiums go up, because Washington will force them to buy more expensive policies.
The debate on health care reform will soon move to the Senate floor, where my colleagues and I will continue to offer better alternatives. We will fight to protect Medicare Advantage, and eliminate the Medicare panel that would empower bureaucrats to make coverage decisions. We support reforming Medicaid, before forcing more Americans into it. We want to lower costs on small businesses, and enact meaningful medical liability reform. We want to ensure that President Obama keeps his promises to the American people, including those related to keeping what you have, taxes on the middle class, federal funding of abortions, and benefits to illegal immigrants.
Republicans will also continue working with our colleagues to ensure a more transparent process, because Texans deserve to know the details on what health care reform will mean for them. I cannot support legislation rushed through Congress without giving our people a chance to know what’s in it. Democracy demands that government be accountable to the people, and government that is open and honest can deliver better solutions. I will continue working toward better solutions on health care reform, and ensure that your voice is heard.
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Author Bios
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Georges C. Benjamin, MD, FACP, FACEP (Emeritus), is executive director of the American Public Health Association, the oldest and most diverse organization of public health professionals in the world, which has been working to improve public health since 1872. Prior to APHA, Dr. Benjamin served as secretary of the Maryland Department of Health and Mental Hygiene. He is well known in the world of public health as a leader, practitioner and administrator, and he is a member of the Institute of Medicine of the National Academies of Science.
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Senator John Cornyn (R) Texas
In 2008, Texans overwhelmingly re-elected Senator John Cornyn to represent them for a second six-year term in the U.S. Senate. Sen. Cornyn was first elected to the Senate in 2002 and previously served in Texas as a district judge, a member of the Texas Supreme Court, and as Texas Attorney General.
Sen. Cornyn currently sits on the Senate Finance, Judiciary and Budget Committees. He serves as the top Republican on the Judiciary Committee’s Immigration, Refugees, and Border Security subcommittee. For more information about Sen. Cornyn's committee assignments, and links to the committee websites, click here.
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