I am certainly no healthcare expert, nor am I a noted economist (or even an ignored economist), so I don’t feel adequate to delve into the nitty gritty of the current House bill. However, it doesn’t take an expert to observe that over the course of the debate about health care from the current administration, there have been numerous contradictions, both in terms of logic and fact. Many of these get short shrift in the 30 second analysis we get from the media.
One of the first logical contradictions one notes has to do with the ‘Healthcare System wastes 800 billion dollars’ vs. ‘Insurers regularly deny care’ claims. On one hand we presented with a picture of stingy health insurers, who routinely deny care in order to line the pockets of their greedy CEO’s. Meant to elicit support for healthcare legislation by generating hatred for the imaginary rich, this is standard class warfare language.
Yet, on the other hand we are presented with a recent study, much touted by government healthcare advocates, that our current healthcare system wastes up to ‘$800 hundred billion a year’ (which coincidently at the time was exactly the same as the cost of the healthcare legislation). This waste was said to be the result of a a number of conditions, including unnecessary procedures and inefficiencies in paperwork. It would follow if the healthcare legislation could fix these cost overruns, it would practically pay for itself.
But it only takes a minute to realize the unlikelihood that both of these arguments are generally true. If health insurers really are money-grubbing dictators trying to squeeze every last cent out of the health system, then why are they completely ignoring the waste of 800 billion dollars? Why wouldn’t they shut down those extra procedures and eliminate the paper work? That’s a lot of cash for those penny pinchers to ignore. Perhaps fixing such problems isn’t so straight forward. Indeed, the government already insures nearly half our population through Medicare and Medicaid – and it has shown no propensity to contain such costs.
In fact, another assumption of the health reform bill is that congress will cut billions of dollars in Medicare programs in the near future. That’s great; but why haven’t they started until now? A lot of the fraud and waste is the product of the Medicare system, which is after all a government run public health insurance option – why should the electorate trust that the broader public option will create efficiencies when we already have a budget busting example of a government run program that has been anything but efficient, by the Democrats own admission?
And finally, we come to the discussion about the public option. Perhaps the most controversial part of the current House bill, the public option will provide a government funded healthcare option, much like Medicare, for those who currently have no health insurance.
The primary argument for this option has to do with the fact that a certain number of people in our country –either 60, 40, or 30 million people depending on the day and who is counting – don’t currently have insurance. The public option would provide for those folks who either due to lack of funds, or some pre-existing condition, have been denied private healthcare. So far so good; it’s hard to deny that basic healthcare should be more accessible.
But the second argument is that a public option will provide ‘competition’ for the private insurers, causing them to bring down costs, and become more efficient. The problem with this though is that it is never explained how it is that insuring folks already deemed ‘uninsurable’ by the private industry will create ‘competition’; competition after all only occurs when two entities vie for a single market. Those who can’t afford insurance and those who can are in fact two different markets – so insurance companies will have no incentive to bring down costs, since they aren’t losing out by maintaining their current practices.
The only way such a situation would be competitive is if the government were to structure the public option so that it was available to those who already had insurance, giving individuals and employers incentives to drop private insurance and adopt the ‘competitive’ (and publicly funded) public option.
If this happened on a wide scale (and why wouldn’t it?) it would inevitably move us toward a government run, publicly funded, single payer healthcare system in our country, much like the socialized systems seen elsewhere – but I am sure that isn’t the intention behind all this at all, is it?