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.

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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?




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Gohmert: Dems Will Drag Out Impeachment — Try To Get ‘Best Socialist’ Nominated For President

During an appearance on Huntsville, AL radio’s WVNN on Thursday, Rep. Louie Gohmert (R-TX) offered his best assessment of what House Democrats were trying to accomplish with their impeachment efforts.

Gohmert told WVNN’s “The Jeff Poor Show” impeachment could tie up the Democratic Party’s presidential campaign efforts but predicted Democrats would use the occasion to nominate “the best socialist” they can.

“They would lose in the Senate,” Gohmert said on impeachment. “And besides that, the entire time it was on trial in the Senate, the Democrats who are running for president wouldn’t be allowed to campaign. That’s in the Constitution. They wouldn’t be able to campaign. I just can’t imagine them wanting to do that because if they send it to the Senate, they have now perfectly set up the scenario of 1996, where they will reassure Donald Trump is reelected as president. They don’t want to do that. They’re probably going to drag this thing out as long as they possibly can … through Iowa, through primaries — try to get the best socialist they can to be nominated.”

“Then just end up and say, ‘Now we’re close enough to the general election. We’ve thrown mud at the president through the House,’” he continued. “What they’re really doing — they’re using taxpayer funds to campaign against Trump. That’s all this is — a campaign fund that taxpayers are paying for in order to try to throw mud at the president. I’ll be surprised if they have that vote, but I can’t imagine they want to set up this president for reelection by having a trial in the Senate where they lose.”

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