By Judith Stein
JStein@medicareadvocacy.org

President Obama recently announced three "bedrock requirements" for real health care reform, and issued a call to action for support of these requirements.  The bedrock requirements for the president are:

1.   Reduce Costs - Rising health care and coverage costs are crushing the budgets of governments, businesses, individuals and families and they must be brought under control

2.   Guarantee Choice - Americans must have the freedom to keep whatever doctor and health care plan they have, or to select a new doctor or health care plan if they choose

3.   Ensure Quality Care for All - All Americans must have quality and affordable health care

My group, the Center for Medicare Advocacy, has also released a call for health care reform – and for support of a public plan option. Health care advocacy groups like ours support a public plan—also called single payer—because it is what really fulfills the president's three key requirements for reform.

Single payer has gone from getting virtually no press coverage to getting a little coverage in recent weeks, largely because of protests on its behalf in Washington. So I’m trying here to present, succinctly, the case for a public plan in the hope that reporters and editors will take a look. In addition, my group has started a blog that may be useful for journalists. (Click here, for example, for a recent entry that lays out 12 reasons for going single-payer.)

A Public Plan Reduces Costs

A public plan offers significant savings in administrative costs, savings that private plans have been unable to match. Currently the administrative cost of Medicare at approximately 2 percent, and the administrative cost for private insurance is approximately 19 percent. Estimates are that more than $350 billion could be saved with simplified single-payer administration.

In addition, because of its broad reach, a public plan would be able to negotiate lower volume discounts from providers and drug manufacturers, making a public plan less costly to individuals.

Some argue that lower drug payments in a public plan would require higher payments from other insurance plans. But the evidence demonstrates that higher payments – those often negotiated by private plans - are not caused by lower payments for medicines in public plans but rather by less efficient administration. (Click here for a PDF report to Congress on this issue by an independent Congressional agency, MedPAC, the Medicare Payment Advisory Commission.)

Finally, a public plan does not earn profits and has no imperative to do so, as private plans do. This allows a public plan to offer lower premiums. Estimates are that premiums in a public plan would be 20-30 percent lower than those of private plans. Lower premiums are of course desirable for the individuals who would be required to pay them, and for the governments or employers who, depending upon the design of the reform package might be called upon to pay premiums on behalf of others.

A Public Plan Guarantees Choice

Unlike a fragmented system of private plans with limited geographic reach and provider networks, a public plan, like Medicare, would be available to anyone, anywhere in the country.  This lets beneficiaries stay with the health care providers they have chosen, and to choose their providers in the future, rather than being forced into a limited network of participating providers.  This choice – of doctors and other health care providers – is the choice that really matters to people.

Also, a public plan would not limit participants to obtaining health care coverage, and care, in a particular geographic area, but rather would allow beneficiaries to be cared for by participating doctors, specialists and facilities nationwide. Again, this is like the traditional, public Medicare program that allows people to obtain care from doctors, hospitals, and other care providers throughout the country.  As in traditional Medicare, nobody in a public plan would be denied coverage for being "out-of-area" or "out-of-network," as so often happens with private plans.

In my view, a public plan option is a key to real health care reform. It would let people choose a stable, well-defined benefit.  Proponents of choice should support offering a public plan, too; not just private plans. To do otherwise is to limit people's options.

A Public Plan Ensures Quality Care for All

A public plan for health care would be nationally available to all.  It would have a defined set of benefits.  There would be no surprises regarding what is or isn't covered – or where. Those who participate in the country's current public plan, Medicare, know this and, as a result, are very satisfied with the quality of their coverage. According to Jacob Hacker, a professor of political science at Berkley and a fellow at the New America Foundation, an  AARP survey shows that 80 percent of people with Medicare are either "extremely" or "very satisfied" with their health care coverage and with access to their physicians. This is a higher rate than that for 50- to 64-year-olds with private insurance. There is no reason to believe that a public plan, as part of national health care reform, would not fare equally as well as Medicare does with customer satisfaction.

Judith Stein is the founder and executive director of the Center for Medicare Advocacy, Inc., and has long focused on legal representation of the elderly. E-mail: jstein@medicareadvocacy.org

Comments

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Posted by Robert Fucigna MD 06/04/2009, 12:43 AM Thank you for your thoughtful explanation, but you miss very key parts of the quasi public, administered by public and private for profit insurance companies, "Medicare system". As you know an agency run by the sitting Government balances the national budget, via changes in fee schedules annually,only to be overturned in the last minute of a bickering "closing" sessions of congress (occasionally they waited until after Christmas Holiday). The insurance companies run the geographic program with different rules in each state and some states have as many as five different rule sets(because of these administrators).That sounds like government not firing on all 4 cylinders. The real problem is that the US economy "protected" its shareholders interest above the good of local economies, moved jobs out of state , abroad ect.Meanwhile, hospitals and health care workers held the "fort down" locally.Unfortunatly the naturale curve of cost can no longer be contained. Hospitals out source radiology to Australia, security force to inadequately trained "rent a cops", Nurses have a very small salary gap between young new grads and established wiser experienced Senior staff members, Physicians are expected to work for free because someone must treat "freebies" meanwhile their overhead cost increases in electricity,insurance and wages threatens to run them out of the same towns industry left behind for China, Laos and Vietnam. Lets face it a single government payor will not bring back the old days,but it does not face the crux of the problem.We can no longer hide in the sand and hope "it" is not expensive. "It" is expensive,as long as we want to beat mother nature with anti biotics, anti cancer walks, and anti aging creams someone must pay for the advancement of life. But I say do as ebay learned, ONE,thin out the middle man,cost will go down, and TWO a multi teared system like the UK,if you dont want to wait a few years for a new hip, fly to India or pay out of pocket with that other thing,Private Insurance! Americans like the UK but we do not want a class system that the Brits seem to be happy with,the wealthy get more for their stiff upper lip! In short we must invest much more cash in the system and reduce redundantcy and waste with the "middleman" government agents.

Independent Health Insurance Broker Posted by Dan Ramthun 06/04/2009, 10:33 AM Judith's comments are typical of an advocate of a government run health plan, it sounds good, but then there is reality. I do understand where she is coming from, as I was an advocate of a government plan before I understood how it all works. Healthcare IS expensive and for many reasons, but there is still affordable healthcare coverage within our current system. I help people find it everyday. Competition is what keeps prices in line, which would be lost with a government plan. Taking the position that a government plan can be run more efficiently than a private plan... you've GOT to kidding. Just take a look the part D drug plan, who thought that up! Private medicare plans are offered for less, with more benefits than medicare and with very nice profits to the company, all for the same cost as medicare! As far as nonprofit being cheaper, I sell both nonprofit and for profit health plans and all are competitively priced. Being denied coverage "all so often" for being "out of network" in a private plan, simply does not happen with a quality plan. I agree with choice. Not only choice of doctors, but choice of what type of plan you have, choice of what coverage you need or don't need, and choice of how much you want to pay. These are choices you can get with the competition of many private plans, not one government plan. There are certainly improvements that could be made with our current system, which is where our focus should be, not in creating an expensive rigid government run plan. The biggest problem I see with healthcare reform. Politicians are relying on advice from people so far removed from the real problems, that they couldn't possibly now how to provide real solutions to those who need help.

Posted by Holly Horne 06/04/2009, 03:03 PM It seems now the private insurers are speaking very softly to try to convince the public the current system only needs minor overhauling. They are concerned about the data that over 60% favor a single payer plan, and are vehemently fighting it. We must make our opinions and reasoning known to President Obama. He said he needed pressure to act in controversial cases....

Ph.D. Posted by Iris Long 06/04/2009, 03:38 PM I also support a single payer healthcare plan. Having worked in the healthcare industry and experience with my own family's medical history and healthcare problems, the necessity and practicality and feasibility of single payer is glaringly obvious. Before Medicare, there was health insurance, but it was only private health insurance. What that health insurance covered was not clear to the consumer. For example, my mother, in preparation for any potential medical crisis, paid for health insurance. She fell ill with a stroke, and the (well-known)insurance company did not pay a dime! Fortunately, she was able to get insurance through the then newly-instituted Medicare program. Also fortunately, my father, who had cancer, was a veteran and was able to be insured through the veteran's system. He could not have paid for other health insurance although he worked hard his entire life in his own business. People want a healthcare insurance system they can trust. Such a system includes accountability, availability accessibility, and equal treatment for all. For the last 20 years or so, the healthcare system has been fragmented with the insurers and drug companies and other medical lobbyists. It is time to streamline the system to make it safer for patients,more efficient and effective.

Miss Posted by J Webb 07/02/2009, 01:28 AM I am British and can assure Dr Robert Fucigna that the British people are sick and tired of being treated according to the ridiculous class system domininating everything here. The only people who are not are the complacent minority who benefit from it! It doesn't only dominate healthcare provision but everything in life and working-class or "ethnic" peoples are being refused basic medical care(never mind that for cancer)and education on that basis. What would the average American say if they heard that a would-be student with very high grades was refused a university place "because he had worked as a miner"! or about Black students being called "N***er" at university interviews. I recently had to personally "play hell" to get a Black woman enduring an agonising miscarriage on a train into a British hospital for treatment. I saw this because I have serious concerns about life policies administered here.

Nice Posted by Elenora 07/03/2009, 03:05 AM Generally I do not post on blogs, but I would like to say that this post really forced me to do so! really nice post. Elenora administration job

Posted by Dr. Thomas E. Davis, Colonel, USA (ret) 08/22/2009, 02:49 PM I have long advocated a single-payer health care system. furthermore, I have propsed that both Medicare and The Federal Employees Health System could and should be tailored to fit all citizens. The Administration of both is in place thus easing the transition of accepting new patients.I have been in Medicare for over 20 years with a supplemental provided through my military retirement. A couple of caveats are necessary: (1) Illegal Aliens Must NOT be covered; (2) Abortion must NOT be a covered item after the embryo transitions to fetal stage; (3) Long-term Care [LTC] should be offered as a supplement at an appropriate actuarial rate; (4) Only the FIRST child born out of wedlock can be covered; (5) Foreigners traveling in the US on a valid passport/visa must be prepared to pay for any and all medical services; (6) All persons upon entering the program MUST be required to execute a 'Living Will', a copy of which, is to be maintained in their medical records; and finally (7) Provisions must be included in the plan to keep abuses to an absolute minimum, e.g. multiple visits/week to the ER, etc. Sincerely; Tom Davis Monroe Twp, NJ Submit a comment - Jump to top of list