The public insurance option is the Lazarus of the health care debate. Time and time again it has been pronounced dead, only to rise again.
Even now, though it was not included in President Barack Obama’s heath care plan, it remains part of the debate. The public option is included in the House bill, and momentum is building in the Senate, where more and more Members are announcing their support for its inclusion in a reconciliation bill.
The resilience of the public option is due to a simple reason — it is a very good idea. Short of a single-payer system, it is the best way of making health care available and affordable to those who don’t have it, and keeping it affordable for those who do. That is why it is supported by a majority of Americans.
The power of the public option lies in the lower-cost competition it would offer to an industry dominated by regional monopolies. Insurance companies like to appeal to free-market principles to argue against the public option, but their market is anything but free. A recent Urban Institute study found that concentration in the insurance and hospital industries has created markets that “by and large are simply not competitive.”
The public option would offer lower-cost competition to these big, monopolistic insurers. It would not be profit-driven and would have far lower overhead costs than private insurers, enabling it to charge lower premiums. Medicare’s administrative costs, for example, are estimated to account for 2 percent to 5 percent of premiums compared with 25 percent to 40 percent of premiums in the individual insurance market.
In addition, no one administering the public option would be making the $10 million-a-year salaries and compensation that many health insurance executives are making.
By offering a lower-cost alternative, the public option would make it easier for the uninsured to purchase coverage.
It would also help those with insurance by forcing the insurers to control premium costs in order to compete.
Critics charge this would cost too much and add to the deficit. The Congressional Budget Office, however, has found that the public option will reduce the deficit over the long term. The robust public option favored by the Congressional Progressive Caucus and other health care advocates, paying Medicare rates plus 5 percent, would save the government $110 billion over the first 10 years of its life. Even the version included in the House reform bill would save approximately $25 billion over that span. These savings could be used to bolster subsidies to make coverage more affordable for the uninsured and to lower the deficit.
Critics also charge that the public option is “a government takeover” of the health care system.
This is wrong, and they know it. The public option would be one insurance option, alongside private health insurance plans. The public plan would compete with the private health companies to get people to enroll.
To be most effective, it would be national, without co-ops or local plans that dilute the power of the public option to deliver lower-cost, higher-quality care.
Another objection to the public option is that it goes too far, too fast. Reform should be more incremental.
But our health care system is in crisis now. More than 40 million Americans are uninsured, more than 85 percent of them in working families. Another 25 million are underinsured. By the end of this day, 14,000 more Americans will lose their coverage.
Even those with health insurance are struggling to meet its skyrocketing costs. Health care expenses for the average family of four are projected to jump $1,800 yearly. Over the past decade, health care costs have risen on average four times faster than workers’ earnings.
Piecemeal tweaking of the health insurance system will not address this growing problem. We need to reform our health care system, and the public option must be included.
I will fight to include the public option in the final version of the health care reform legislation.
If it is not included, however, it will rise from the dead once again.
The day after the health care legislation is passed, I will introduce a bill calling for the public option.
Rep. Lynn Woolsey (D-Calif.) is co-chairwoman of the Congressional Progressive Caucus.