Obamacare's Public Option Is No Longer Defensible

Since I last wrote about it, Aetna’s withdrawal from the Obamacare exchanges has ginned up even more drama. 

Jeff Young and Jonathan Cohn of the Huffington Post published a letter in which Aetna told the Justice Department that it would reduce its exchange participation unless Justice allowed the merger with Humana to go through. This has naturally triggered a firestorm of accusations about “extortion” and renewed calls for a public option that can protect people against the threat of insurance-less insurance exchanges.

Could a "public option" fix the problems on the exchanges? More precisely, the question is: What problem would a public option solve?

Way back in 2010, when the idea of a government-run nonprofit health insurance option was hotly debated, supporters gave three answers to that question:

  • A public option does not need profits, so it can sell insurance cheaper than an insurer that wants to mark up coverage for profit margin.
  • A public option will have lower administrative costs than a private insurer.
  • A public option can force providers to accept below-market reimbursements for their services.

The first argument turns out to be irrelevant, because with the exception of Medicaid managed-care plans, few insurers seem to be taking sizeable profits out of the exchanges. Indeed, since the public option was conceived as self-funding (meaning it covers its costs out of premiums, with no subsidies), there’s a high risk that the public option would prove as doomed as the co-ops, because it would have neither the experience in caseload management to make money nor the other lines of business to subsidize losses on the exchanges.

However, supporters argue that a public option would have competitive advantages that would allow it to break even where others are currently losing money. One of those competitive advantages is lower administrative overhead -- in theory, at least. I’ve already outlined, however, why I’m skeptical of this: While Medicare does have lower administrative costs than insurers, a lot of that benefit lies either in outsourcing normal administrative costs to other parts of the government (where they are still costly, but not on Medicare’s books) or in not doing things that insurers have to do, like all the boring customer service and billing that comes with selling to the public, rather than enrolling every citizen over the age of 65.

And then there are provider prices. Medicare pays providers less than private insurers. The idea is that the public option could pay more than Medicare, but less than private insurers (say, Medicare rates plus 5 to 10 percent), and thereby offer a cheaper product than private insurance.

In some sense, it’s hard to argue with this: A public option could do this. In theory. But … if this idea is so clever, why haven’t insurers done it? Probably because they will have difficulty finding enough providers who will accept those reimbursements.

read more:


Views: 294

Reply to This

Replies to This Discussion

this is going just as they planned now big brother must step in with single payer and that is even worse. this train wreck is devastating to all and all will suffer

OBamaCare never was defensible - nor was it Constitutional, until Justice Roberts caved.



Someone needs to put a round in it!

It never was defensible.... it was criminal...

Single payer which was the plan from day one.  Millions will die and this country will suffer like never before.

The only tool of government is physical force and the only proper use of it is retaliatory. When government goes beyond its proper function (the protection of inalienable rights) it can only do so by initiating physical force, which is going to violate rights. So when government tells insurance companies how to run their business, it can only do so by threatening physical force (pay a fine or go to jail). To learn the details of inalienable rights and the proper function of government, watch this series of short videos.
#1 Inalienable Rights, Where Do They Come From?




Political Cartoons by Michael RamirezPolitical Cartoons by AF Branco

Political Cartoons by Lisa Benson


Obama Lies Again: – Ignores That The Year After Signing The Stimulus More Than (4) Million Jobs Were Lost

Former President Obama, the only President in US history who had his FBI and other Intel agencies spy on the opposition party candidate, claims that he created the great economy that Americans are enjoying today. The only thing Obama created was debt and massive job losses with his horrible economic recovery.

Yesterday the former President tweeted an effort to take credit for President Trump’s successful economy:

Joe Hoft@joehoft

Of course another @BarackObama lie. He can’t open his mouth without lying. 11 years ago the US lost (4.3) million jobs over the next 12 months. Horrible liar. https://twitter.com/barackobama/status/1229432034650722304 

Barack Obama  @BarackObama

Eleven years ago today, near the bottom of the worst recession in generations, I signed the Recovery Act, paving the way for more than a decade of economic growth and the longest streak of job creation in American history.

President Obama’s policies were a disgrace and a failure. He doubled the national debt in spite of zero interest rates from the Fed. His recovery was the worst in US history.

Also, Obama’s assertion is just plain false. The ‘Stimulus’ was passed in February 2009 right after Obama took over the Presidency. He promised to not pass any bills for at least a week to allow for the bills to be read by the people but lied as soon as he was sworn in. The Stimulus was hundreds and hundreds of pages of government handouts to Democrat districts and it was close to $1 million. This was not what America needed and it led to the Tea Party.

Far-left Wikipedia has this to say about the Stimulus:

Note that in his infinite wisdom, NYT economist Paul Krugman is credited with arguing that “the stimulus was far smaller than the economic crisis warranted”. (He also said the markets would crash and burn if President Trump was elected President.)

The data shows that the 12 months after Obama’s stimulus, the US lost 4.3 million jobs:

In Obama’s first three years he netted a loss of 1.5 million jobs compared to President Trump who has added more than 6.7 million jobs.

When it comes to the economy, the billionaire schools the community organizer every time.

Tucker: Bloomberg is trying to buy the election

© 2020   Created by Steve - Ning Creator.   Powered by

Badges  |  Report an Issue  |  Terms of Service