May 23

Can Public Option for Health Insurance Fix Healthcare? No.

by Wayne W. Oliver, Vice President, Center for Health Transformation
Originally published by the Atlanta Journal Constitution on April 23, 2009

All Americans want health care coverage. All Americans like choice. Americans who like their current health insurance coverage should be able to keep it.

Those without coverage should have the freedom to choose the most appropriate plan that fits their specific needs and that of their family. But, everyone should have access to affordable health coverage.

President Obama wants to create a public plan option for health consumers under the age of 65. The public plan option will establish a government-run health insurance company — a move that is poised to undermine health care providers, employers and the very sustainability of the entire health care system, not to mention the health and well-being of patients.

Big government should not stick its nose into private markets — much less compete in them.

We have tried something similar to a public plan option. It was called TennCare in Tennessee, and it failed miserably. After the better part of two decades of out-of-control expenditures, TennCare is now being dismantled because it was too bureaucratic, too inefficient, did not improve health outcomes and was costly for taxpayers.

Rather than compete with the private sector, the appropriate role of the government should be to create incentives for innovation through the private health insurance market. Plans must focus on prevention, wellness and effective disease management.

The creation of a government-run health insurance company could jeopardize coverage for 130 million Americans who are currently receiving it through the private sector.

What happens when health insurers begin to withdraw from the private sector? A lack of competition results in higher costs.

Then, we are left with fewer choices of health insurance coverage and even fewer options of medical treatments. Having fewer choices at higher costs of lower quality is not how we believe we should approach reform.

Everyone should be required to have health insurance coverage; or, if they are opposed to insurance, they should post a bond. Insurance can be issued by employers or purchased by an individual from a private health insurance company. If purchased by an individual, they should be able to deduct health insurance premiums from their taxes just like employers can.

The working poor could receive subsidies to help with the cost of coverage. Everyone would have coverage – all 300 million of us.

Our goal should be to have a 300 million-payer system that is individually focused, wellness- and prevention-driven and based in the private sector.

At a time when new scientific breakthroughs are occurring almost daily, we must have a system that accelerates the discovery, development, dissemination and delivery of those solutions that can save lives and create better health.

Yet by their very nature, government bureaucracies are slow, inefficient and stifle innovation. It is exactly the opposite of what we need today.

Actuaries have said that the Medicare system is going to start running deficits as soon as 2017.

If federal bureaucrats can’t manage Medicare, why then do we want these same bureaucrats to run a new government-managed health insurance company?

America has really good sick care, but we need a system that creates incentives for physicians, clinics and hospitals to keep individuals healthy.

We need to let the private sector lead the way by implementing innovations to develop an individually centered, wellness- and prevention-focused, coordinated system of care.

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