Free Markets, Free People

public option

Dumb idea of the day – Reintroduce the public option to lower deficit

Yes, that’s what 128 Democrats in the House are sure will be the way to lower the deficit in coming years:

As both political parties worry about the growing federal deficit, an unlikely proposal is returning from last year’s divisive healthcare debate: the "public option."

Creating a major government health insurance program was roundly rejected last year, but 128 House Democrats are pushing to reconsider the idea, contending that it would hold down federal spending.

Anyone – what are Medicare and Medicaid? Well, yes, you’re right, they’re "government health insurance programs". And how solvent are they? Well, you’re right again – they’re not. Both have unpaid future liabilities in the tens of trillions of dollars.

So explain to me how, after these two "government health insurance programs" have been mismanaged to the point of impossible future liabilities, giving the government the rest of the population will, as CBO claims "save the government $68 billion between 2014 and 2020.

Yeah, see, I’m not on board with this idea at all – seems to me to be more smoke and mirrors. I’d love to the reasoning behind the CBO’s findings. Oh, wait, how about this:

The government’s administrative costs would be lower than private insurers’, proponents say, and it could pay hospitals and doctors less.

No, their admin costs are not "lower" and that’s been pointed out ad naseum for quite some time. They just passed the "doc fix" and there is no stomach (or spine) to cut doctor’s pay in the Congress and they risk all sorts of problems if they cut pay to hospitals.

So yes, I’m right – smoke and mirrors.

Let’s see how they play this hand of vapor as Democrats try again – before the window closes for good – to move us another step closer to single payer with nothing more than hot air promises as a basis for their arguments.

~McQ

[ad] Empty ad slot (#1)!

[tweetmeme only_single=”false”]

Health care reform – on to step 2

Harry Reid sent a letter to Sen. Bernie Sanders saying he planned to introduce the public option in a month or so.  Democrats in the House aren’t waiting that long.  Again, assuming they know that their liberal agenda window is closing, “progressives” plan to get the most bang for their buck:

A leader of the House liberals’ caucus said Monday she’ll introduce new legislation to revive the public option.

Rep. Lynn Woolsey (D-Calif.), the co-chairwoman of the Congressional Progressive Caucus, said she plans to unveil legislation to add the government-run option to the national healthcare exchange established by legislation President Barack Obama is to sign tomorrow.

“We will introduce a robust public option bill on the very day the president signs the reconciliation bill into law,” Woolsey said Monday during an interview on MSNBC.

The public option, of course, is the precursor to single-payer and the progressive caucus has never been shy of telling anyone who will listen that’s what they want for real health care reform – a government run insurance program.

Meanwhile states are beginning to line up to file suit over the current bill which passed the House Sunday night – 11 or 12 states, including TX, FL and VA, plan on filing lawsuits upon the signing of the bill into law. FL, for instance, is claiming two elements of the bill are unconstitutional:

McCollum said the challenge is on two constitutional grounds: 1) its mandate that everyone must buy health care insurance, and 2) the new law challenges the sovereignty of states by forcing them to do things they cannot afford. He said the 10th Amendment protects states from that.

“It goes far beyond an unfunded mandate and would literally cost the state of Florida alone billions of dollars in additional costs to be able to implement,” McCollum said. “The whole bill is unconstitutional that it manipulates the state into doing things it cannot afford.”

If the individual mandate were to be ruled unconstitutional – and I think there’s a good chance there – it would cripple the law. One of the main funding provisions has to do with the mandates and fines for those who don’t comply. Of course if the court were to find for the states based on the 10th amendment argument (something I have no idea whether it has sound legal footing or not given the number of mandates the states presently have), the law would push all the cost back on the federal government and destroy any argument, however absurd, that it will reduce the deficit.

The point? The HCR debate is far from over. The left is going to continue to push for more and more add-ons to work toward their real goal – single payer, government run health care. The right is going to have to fight on two fronts – in the Congress where the 41st Senate vote will be very important and in the courts.

~McQ

[ad] Empty ad slot (#1)!

Harry Reid promises to bring Public Option to a vote in the next few months

Huzzah!

No, not really – but I’m sure that’s the reaction on much of the “progressive” left.  Most of them figure without a public option the chance of actually swinging a government single payer system is a whole lot harder.   With it, they have a pretty good chance.  Harry Reid promises to oblige:

Hoping to assuage progressive Democrats who remain disappointed with the content of the health care reform bill, Senate Majority Leader Harry Reid (D-Nev.) committed on Friday to holding a separate vote on a public option in the coming months.

In a letter to two of his more progressive colleagues in the Senate — Jeff Merkley of Oregon and Bernie Sanders of Vermont — the Nevada Democrat implicitly apologized for his inability to get a government-run insurance plan into the final piece of health care legislation and promised to keep working to get the policy into law.

And don’t expect Mr. Reid to follow the rules of the Senate when he does – oh, no, that day is over apparently (well, except when his party is in the minority again – the caterwauling will be epic).

The search now is for a vehicle outside health care reform to get a public plan into law. The same institutional hurdles that killed the provision in the previous go-rounds — mainly that there aren’t 60 supportive senators to break a filibuster — remain. But aides on the Hill are already looking to future reconciliation vehicles to which they can attach the public plan, which would, in turn, allow for it to pass via an up-or-down vote

Welcome to the world’s largest Banana Republic.

~McQ

[ad] Empty ad slot (#1)!

CBO Says Public Option Would Cost More Than Private Insurance – Don’t Believe It

And the Politico presents that little nugget this way:

The public insurance option would typically charge higher premiums than private plans available in the exchange, according to the Congressional Budget Office analysis of the House bill.

That surprising conclusion raises doubts about Democratic promises that a government-run insurance plan would provide a lower-cost alternative to consumers. At the same time, it calls into question Republican charges that the plan amounts to government takeover of health insurance — because only 6 million people would enroll in the plan, according to the CBO.

Nonsense. As has been pointed out any number of times, it depends on how robust the public option is, how it is configured and whether or not it uses public money. If, for instance, it was structured as some would like – Medicare – there’s no question that what the GOP charges would be true. And, this is the House bill before the vote. What I think is may happen is this version of a “public option” may be in there as a place holder to get the bill passed out of the House with the idea that a more robust version will be added during the markup with the Senate version (assuming it gets passed). CBO has most likely scored this particular House version properly for now but don’t believe for a second that ends this.

In this fight, every trick in the book is being used, and if you believe this is the final version of the public option, I have some ocean front property in Kansas in which you may be interested.

This isn’t about a sales job, folks.  It’s about a con job.

~McQ

[ad] Empty ad slot (#1)!

Is A “Public Option” Really Popular With The Public?

Although Obamacare is still pretty unfavorable to most Americans (and getting worse?), for some reason a nebulous “public option” continues to poll rather well. Jay Cost takes a look at the polling data and offers a reasonable suggestion for the disparity:

How can we reconcile these gloomy numbers with the sunny results on the public option?

It might be due to the public’s lack of information. I’m sure that the average polling respondent is paying some attention to the health care debate, but she is paying much less attention than political junkies. This will limit the amount of information she actually has in her mental filing cabinet. So, the crucial question is: even if she has absorbed some pro- and anti-reform arguments, does she have enough information to relate them to specific reform proposals? Color me skeptical on that one. I think your average respondent – even with some general opinions on reform – will have a hard time using those broad considerations to evaluate items like the individual mandate, guaranteed issue, community rating, and…wait for it!…the public option.

So, asking about specific proposals might be taking the conversation too far into the woods for the average respondent – and she is going to have a hard time recalling a relevant piece of information upon which to base a response. Instead, she might use the question itself as a basis for her answer. It follows that the information or perspective given in the question could make her more or less partial to the proposal under consideration.

I made a similar argument back in August when dissecting a report alleging that there is 80% support for the public option. Among other problems with supposed poll, it was not at all clear that respondents even new what was meant by “public option”:

If in fact the question was worded as described by Singer, then the inclusion of the phrase “if they can’t afford private plans offered to them” alters the results dramatically. Although some have suggested that this is the reason we need health care insurance reform so desperately, it completely ignores the fact that those who can’t afford health insurance are generally covered by Medicaid, SCHIP and other federal and state programs. So when respondents are asked whether such people should be covered, how do we know they aren’t thinking about those federal and state programs already in existence and not the public option as proposed by Obama and Congress? In short, we don’t. To be fair, the question allegedly refers to “starting a new” program, but that doesn’t necessarily mean that people understood the question to be asking about ObamaCare’s public option.

Indeed, according to PSB, “only 37 percent define ‘public option’ correctly” and “about one-fourth of those polled believe the ‘public option’ is a national health care system, similar to the one in Great Britain.” Of course, how to “correctly” define the public option is not revealed, but suffice it to say that the survey’s respondents did not reveal they had a concise grasp upon what a public option actually means.

The fact is that most people have better things to do with their lives than become expert in the sausage-making going on in D.C. That they are rationally ignorant (and, thanks to the MSM, often completely misinformed) of the details regarding the public option should come as no surprise.

But Cost digs much deeper and finds that the wording of the survey questions makes a dramatic difference. He points out that most of the recent polling uses “feel-good-phraseology” that tends to diminish the concept of government control and assume the idea that the public option would “compete” with private insurers:

If the theory that question wording is playing a role is correct, then altering the wording should induce a change in the results. So, what happens when information less partial to the Democratic side is introduced? To start answering this question, let’s consider the Gallup results, which are decidedly less bullish on the public option:
USA Today Gallup Poll

Like ABC News/WaPo, Gallup uses the Democratic buzzword “compete.” However, Gallup also uses a Republican buzzword: “government-run.” This is opposed to the weaker formulation – “government administered” – offered by CBS News/New York Times and CNN. With this more balanced choice of words, Gallup finds a roughly even split. I would not call this definitive evidence, but it suggests that we might be on the right track.

More damning is the result of a Rasmussen poll where the wording is less “feel-good” and the public option question is followed up with this one:

Suppose that the creation of a government-sponsored non-profit health insurance option encouraged companies to drop private health insurance coverage for their workers. Workers would then be covered by the government option. Would you favor or oppose the creation of a government-sponsored non-profit health insurance option if it encouraged companies to drop private health insurance coverage for their workers?

What happens when this Republican argument is substituted for the Democratic argument? Support for the public option plummets dramatically. Nearly 3/5ths of all respondents voiced opposition to the public option when it was phrased in this way.

Additionally, Rasmussen asked whether respondents thought the public option would save taxpayers money (they didn’t), whether they thought it would offer better health insurance than private insurance (again, no), and whether people preferred to have a public option or a guarantee that nobody will lose their current coverage (the guarantee won in a landslide).

As Cost admits, none of this means that people are necessarily against the public option, just that their opinions are highly influenced by the way questions are asked, stemming from the fact that they are relatively uninformed about the topic. However, Cost’s theory would explain why there is such incongruity between the public’s distaste for the ObamaCare plans floating around Congress and their seeming desire for a public option. Interestingly enough, it also explains why “Medicare for all” is the new rallying cry coming from Washington.

[ad] Empty ad slot (#1)!

If The Public Option Is Dead The Democrats Killed It

Not that I’m complaining.

Max Baucus’ Senate Finance Committee voted on Jay Rockefeller’s public option amendment. No joy for public option supporters:

After five hours of debate, the Senate Finance Committee this afternoon voted down Sen. Jay Rockefeller’s proposal for a public option to compete with private insurers.

Though a majority of the committee’s Democrats supported it, the amendment was defeated overwhelmingly, 15-8. The proposal sought to create a public health insurance option that would set rates like Medicare does.

Now as I understand it, there are 13 Dems and 10 Reps on that committee. So it is important to understand that all that is required for anything to come out of that committee the Democrats want is to vote the party line. 10 Republican cannot stop a thing.

Which brings us to the second public option offering and vote:

The Schumer market-responsive public option amendment has now failed. It was called at 3:50.

The vote was 10-13. Three Democrats opposed.

Two Democrats (Bill Nelson of Florida and Tom Carper of Delaware) voted for Schumer’s amendment after opposing Rockefeller’s.

But Sens. Max Baucus, Kent Conrad and Blanche Lincoln still opposed.

Baucus has been quoted as saying his job is to fashion something that will draw at least 60 votes (and a public option won’t do it).  Ben Nelson feels that they need 65 votes (meaning 5 Republicans have to go along) on any Senate bill to make it “legitimate”.

Of course this doesn’t mean some other Democrat won’t try to offer a public option amendment to the bill, but my sense is if Schumer can’t get it done, it’s not going to get done. I guess the Senate is left to talk co-ops and triggers instead while the leftosphere and the House Progressive Conference does a slow burn.

~McQ

[ad] Empty ad slot (#1)!

Obama To Finally Lay Out His Health Care Insurance Reform Goals

Under the department of “it’s about time” we learn this from Marc Ambinder:

Next week, President Obama is going to give Democrats a health care plan they can begin to sell.

He plans to list specific goals that any health insurance reform plan that arrives at his desk must achieve, according to Democratic strategists familiar with the plan. Some of these “goals” have already been agreed to, including new anti-discrimination restrictions on insurance companies. Others will be new, including the level of subsidies he expects to give the uninsured so they can buy into the system.

Obama will also specify a “pay for” mechanism he prefers, and will specify an income level below which he does not want to see taxed.

I guess Democrats feel it’s better late than never, but if health care insurance reform is Obama’s highest priority and signature issue, shouldn’t this have been something handed to Congress on January 21st instead of something finally cobbled together in September?

And doesn’t this again demonstrate both a lack of executive experience and leadership we’ve been talking about for the past two days? In a word: yes.

As to the cite above, one of the more interesting aspects of his plan will be how he plans on paying for it or, as Marc Ambinder says “what income level below which he does not want to see taxed”.

This will be interesting as well:

He will insist upon a mechanism to cut costs and increase competition among insurance companies — and perhaps will even specify a percentage rate — and he will say that his preferred mechanism remains a government-subsidized public health insurance option, but he will remain agnostic about whether the plan must include a robust public option.

This is the holy grail to much of the liberal left. If he bails on this, he’s going to be seen as a milquetoast by that part of the base. One of the things that is irritating the left is the fact that they have majorities in both houses of Congress and they aren’t just ramming through what the liberals want. The reality-based community refuses to face the reality of actual governing but that’s not a particular surprise.

Anyway, it will be interesting to see, depending on what he lays out, whether the bulk of his criticism and resistance comes from the left or right – or both.

Though officials would not provide the numbers Obama plans to use, they say that the goal is to give his side — Democrats — a true presidential plan that they can sell. That includes the rebranding of several consensus initiatives, like the insurance reforms, as his own. The effect of this sales job, if it works, will be to associate the president with parts of the reform bills that are almost certainly likely to pass — assuming the Senate doesn’t bog down.

There’s one problem with all of that though – by finally issuing the guidance and goals for this plan that he should have issued the day after he took office, he is tacitly acknowledging that what has been produced by Congress to this point is a non-starter. How well that will go over in there remains to be seen. And how well his “rebranding” will do remains to be seen – to resurrect a saying which became a cliche during the campaign, you can put lipstick on a pig …

Per Ambinder, this setting out of Presidential “specifics” is meant to “sooth the concerns of the Democratic caucus”. I’m wondering if this may not be a little to far down the track for that to happen.

Then there’s this:

The budget reconciliation process remains a cudgel — it’s still the weapon of last resort, and President Obama has told his advisers that he does not want to ask Congress to use the mechanism until it becomes necessary, politically — that is, until the public understands that the popular elements of reform will not pass without using it.

If you think selling the legislative monstrosity Obama – Kennedy – Chappaquiddick Memorial Health Care Insurance Reform Bill is going to be tough, try selling a resistant public with the song and dance that it was necessary to use parliamentary tricks to ram through what couldn’t be passed under normal Congressional rules. I’m sure that’ll impress the heck out of everyone and make them more than willing to support the party in power at the next election.

I’m of the opinion that because this is so late in coming, Obama’s “plan” may end up further muddying the water instead of clarifying it. And if so, September may end up being about as kind to Obama and the Democrats as was August.

~McQ

[ad] Empty ad slot (#1)!

Public Option Questions

The reasoning behind the much ballyhooed, on-again, off-again “Public Option” has never made much sense to me, but lately I’ve noticed a few things that make it even less understandable.

For example, as Bruce highlighted below, Rep. Eddie Bernice Johnson (D-Texas) said the following about it on Sunday:

“The only way we can be sure that very low-income people and persons who work for companies that don’t offer insurance have access to it, is through an option that would give the private insurance companies a little competition,” she said.

Johnson added that House liberals have already told Speaker Nancy Pelosi (D-Calif.) that she should insist on White House support for a public option.

How does a public plan offer competition to insurance companies by covering people who don’t have access to insurance? Apparently, these are people who insurance companies aren’t interested in catering to, so there is no competition to gain them as clients. Giving them “free” health insurance from the government isn’t going to change that. Instead, it’s just going to cost more taxpayer money.

Here’s another head-scratcher from Susie Madrak:

Oh, the Republicans have been having a field day with this mantra – that employers would shunt their employees into the public plan. But they’re really upset for the same reason Sebelius mentioned as a positive: Job lock. Above all else, the Republican party stands for cheap, disposable labor with no rights or protections. God forbid you should have a public option – you could up and leave your job anytime you wanted!

While I agree that we would all be better off if health insurance was decoupled from our jobs, I’m not sure that the public option prevents “job lock”. Presumably, what keeps most of us from “up and leaving” our employment on a whim is the paycheck we receive and not the health care insurance. And even if we do, COBRA is already in place to help maintain coverage, and HIPAA prevents insurance companies from refusing to cover any pre-existing conditions. Moreover, if having a public option encourages people to cease being productive members of society (i.e. working at a job), that would be a net negative for society, and would surely cause a loss of tax revenues (which we would need a lot more of in order to pay for all that “free” health care). I just don’t see how a public option can prevent “job lock” any more than we already have now, and even if it did, I’m not sure that’s a good thing.

And then there is this little ditty from Publius that requires the suspension of an enormous amount of disbelief to even begin pondering:

In terms of broader perspective, Jacob Hacker has one of the best defenses of the public option that I’ve seen. One important point he raises is that it’s actually a way to prevent overreliance on excessive regulations and bureaucracy.

The argument is fairly simple. Any type of reform is going to require a lot of regulatory oversight. That means detailed regulations, lots of regulators, etc. If, however, the country had a public option, the insurers would suddenly have a market incentive to comply with these requirements without so much regulatory coercion and administrative costs.

In this respect, the public option actually reduces the need for government — and reduces the threat of agency capture and other public choice-ish problems (especially at the state level).

First of all, has there ever been any government program that didn’t have a slew of regulators accompanying it, much less one so massive as to cover the entire nation?

Secondly, if you go and read Jacob Hacker’s post, you will see that the whole point of the public plan (in his view) is to make all the private plans that may be left (i.e. those accepted to be offered within the insurance exchange run by the government) act just like the public plan. Yet the private plans will never be able to function the same way that the Public Option does, and so the chances are that such plans will go bankrupt trying.

In essence, there would be three types of plans: Public Option, Inside the Exchange, and Outside the Exchange. The Outside plans would be prohibited from signing up new insureds, so they will eventually die off. The Inside plans will be forced to compete against the Public Option for new customers as well as for keeping the ones it already has. Because the Public Option will be unchallengeable — that is, immune from lawsuit by competitors — and financed by the deepest pockets in the world, the Inside plans will be at a grave disadvantage. Not only will the Public Option be able to offer lower cost plans at the expense of taxpayers, it will also have the ability to hide administrative costs thus making itself appear much more efficient than the Inside plans. The Inside plans, therefore, will have to compete against a much better capitalized, immune from lawsuit, more efficient on paper Public Option without any of the Public Option’s benefits or access. There is simply no way for them to act like a better government plan than the real thing, and they will eventually collapse.

How does that make anything better, much less cheaper, if the Public Option drives all the competition out of the market, leaving taxpayers holding the bag for everyone’s health care?

It is this competition that Hacker thinks will force the Inside plans to behave pursuant to the laws and regulation granting them access to the exchange, and which Publius thinks will save money on regulatory costs, etc. Yet those laws are going to have to be policed, and the regulations will still have to be promulgated to carry out the Act. While the Inside plans may have a little extra incentive to behave in the way that the government wants (Hacker’s example is using across-the-board community rating so that everyone pays the same premium for insurance) by having to compete against the Public Option, they would still have to comply with Act if there were no Public Option. Moreover, what would make the regulators jobs even easier is that each of Inside plans would be more than happy to rat out a plan that doesn’t behave, thus possibly reducing competition and grabbing a larger slice of the exchange market for itself.

In short, there is simply no way that having a Public Option is going shrink the government or save any money in regulatory costs. To believe so, one has to ignore all history of government and disregard how market competition under a regulatory regime actually works.

Those are just of few of the questions I’ve had about why a Public Option is so gosh darn important. The fact of the matter is that, other than the hardcore progressives, no one will say the real reason that they want the Public Option: so that all profit incentive is wrung out of the delivery of health care. It’s a stupid reason to want government run health care, but I think it’s pretty clear that’s the real reason. All these other excuses are lame attempts to hide the ball. Which is probably why they don’t make any sense.

Obama’s Visit With The AMA

I‘m not sure what part of this Obama doesn’t understand.

On the one hand, he told doctors at the AMA convention yesterday that he was not a fan of tort reform and felt that limits on malpractice cases was a disservice to those who were truly injured.

On the other hand he made this case:

Not long ago, doctors’ decisions were rarely questioned. Now they are being blamed for a big part of the wasteful spending in the nation’s $2.5 trillion health care system. Studies have shown that as much as 30 cents of the U.S. health care dollar may be going for tests and procedures that are of little or no value to patients.

The Obama administration has cited such findings as evidence that the system is broken. Since doctors are the ones responsible for ordering tests and procedures, health care costs cannot be brought under control unless they change their decision-making habits.

Somehow, apparently, he doesn’t understand the linkage. But AP’s Ricardo Alonso-Zaldivar thinks there’s a much more basic reason than Obama not understanding the linkage:

If Obama announced support for malpractice limits, that would set trial lawyers and unions—major supporters of Democratic candidates—on the attack. Not to mention consumer groups.

Somebody has to go under the Obama bus and the apparent choice is doctors.

USA Today led its story about Obama at the AMA convention with this:

President Obama told wary doctors Monday that the nation’s health system is “a ticking time bomb for the federal budget” and said those who call his plan for a taxpayer-funded coverage option a step toward a government takeover of health care “are not telling the truth.”

Of course the one “not telling the truth” in this case is President Obama. Any “public” option funded by taxpayers is not going to be competing on the same level of the playing field as private insurance carriers. Right now there are 1,300 private choices out there. The introduction of a taxpayer funded “public” option will, according to many economic and health care experts, end up seeing employers dump private health care coverage in favor of public health care coverage and eventually see the system become a single-payer public plan.

That’s why there is such fierce opposition to this sort of an option. Even those in favor of the public option know it is a means to single payer and willingly admit it. So to have the President stand up in front of a group of doctors and tell the whopper he told yesterday is disappointing but not unexpected. He’s lowballed the cost, he’s dissembled about how it is going to be paid for and now he’s being totally disingenuous about the eventual end-state a public option would bring.

~McQ