The Left’s Public Health Option Problem

For advocates of guaranteed truly universal healthcare the debate over Obama’s  reform efforts have been rather disappointing.

Despite the fact that a clear majority of Americans prefer joining the rest of the developed world and having a comprehensive government plan that cover everybody, President Obama and most of Congress, all of whom have received large sums of campaign donations from the drug and insurance industries, have made a government run plan that would not sell healthcare as a commodity to make profit, a non-starter. As a result, single-payer healthcare advocates, despite having overwhelming grassroots support, have been dismissed in Washington.

Now, with few other options, liberal members of congress and advocacy groups have largely focused their advocacy and money behind what appears to be the most heated battle over possible healthcare reform this summer: the fight to include a "public option" to compete with private plans in the healthcare package.

Predictably, ideologues opposed to any kind of government involvement in healthcare are fighting tooth-and-nail to oppose this option, ridiculously, calling it a step towards socialism. But as much of the left rallies to counter these shameful distortions, they may want to consider a very important question. What exactly are they fighting for?

By taking single-payer off the table at the star, Obama and his supporters may have put all of their fuel into a sputtering vehicle. To date, two state governments Massachusetts and Vermont have attempted to implement "hybrid" pseudo-public solutions to major healthcare problem. Sadly, in both cases the results have not been promising.

Those of us living with the new and once-highly touted Massachusetts plan, which aims to cover everyone by requiring that everyone buy insurance (and providing subsidies for those who cannot afford it), have become all-too familiar with the problems of this arrangement, which was worked out in 2006 between Mitt Romney and the Legislature.

The Boston Globe’s recent  front-page article highlighting how Boston Medical Center, which provides more healthcare to the poor than any other hospital in Massachusetts, is facing major deficits largely because the 2006 healthcare legislation has bled money from the "free care pool," is only one example of how this legislation, well-intended it may be, is not sustainable.

By June 2011 enrollment in the plan is projected to be 342,000 people at an annual expense of $1.35 billion up considerably from the original projections of covering 215,000 people at a cost of $725 million.  

Moreover, because so much of the funding for the plan has come from the state’s free care pool, many low-income residents who were once able to get care, now face  unaffordable co-pays, premiums and deductibles (which have already risen 9.4 percent since passage of the reform.) According to a study done by the Physicians for a National Health Program,  "if a middle-income person on the cheapest available state plan got sick, he or she could end up paying $9,872 in premiums, deductibles and co-insurance for the year."

Vermont’s Catamount Health, public-private hybrid effort to cover the state’s uninsured population now at 11 percent is also failing. Passed in 2006 as a compromise after Gov. Jim Douglas vetoed single-payer legislation, the bill, unlike the Massachusetts plan, does not mandate residents buy insurance. Instead it offers residents a chance to purchase healthcare from Blue Cross Blue Shield of Vermont with help of government subsidies based on income. But the plan, even according to its own advocates, does little to solve the problem.


One reason: the plan is unaffordable for many working Vermonters. Even those with no income must pay a monthly premium, and someone earning $30,000 a year still must pay $160 a month for coverage, plus monthly deductibles and co-pays for prescription drugs and doctor visits. Accordingly, less than a quarter of those eligible have signed up for the plan. Catamount can also deny coverage for pre-existing condition and the recently unemployed must wait a year before they are eligible for the program. Since Vermont, like so many other states, is facing dreadful revenue forecasts, the co-pays and premiums may well be raised in the near future.


As Peter Sterling, Catamount Health’s outreach director told Seven Days, Vermont’s largest weekly paper, "It doesn’t solve the big problem, and we know that."


Sterling’s words, and the failure of both of these reform efforts, could serve as a warning for healthcare activists as the national debate over a public plan reaches critical mass. Putting all of our muscle and money into a potentially doomed public option something that "doesn’t solve the big problem" may yield little benefit in the fight for universal healthcare.  Worse, if Congress pushes through a failed public option, neutered by congressional Republicans, it could give the concept of public healthcare an undeserved black eye in the eyes of many Americans.


In fact, a more intriguing consolation prize in Obama’s health reform bill may come in the form of Sen. Bernie Sanders (I-Vermont) who has a plan to attach a provision that would help fund pilot programs for universal healthcare in five states — one of which would be a single-payer plan. This could prove to be a sterling example of the cost-effectiveness of such a program. If Sanders’ home state, Vermont, were to implement state-wide single-payer, it would save the tiny state a sizable $51 million a year, according to a study commissioned by the Vermont Legislature in 2006.


Despite such unceasing opposition from Washington, giving up on single-payer healthcare is not a wise move. As healthcare costs continue to skyrocket, the likelihood of a single-payer plan becoming reality in the US will only increase. The United States currently spends about 16 percent of its GDP (and rising fast) on healthcare more than any other country in the world and still has embarrassing rankings on infant mortality, life expectancy and overall healthcare rankings, according to the World Health Organization and BMJ, a peer-reviewed international medical journal. 46 million are left uninsured with many more underinsured, and an estimated 18,000 people die each year from lack of insurance.


Since nearly half of healthcare costs go towards corporate profits and administrative waste two expenses that are virtually eliminated by implementing a single-payer system in time some kind of not-for-profit government-run system is the only option that will make any fiscal sense. This reality should not be lost in the battle for a doomed-to-fail half measure that may or may not be attached to healthcare reform in the coming months.


Leave a comment