Wednesday, February 17, 2010

Why the public option is good for everyone.

You've probably already figured out from reading my posts that I am in favor of healthcare reform. I also favor the public option, and I am very pleased to see that it may not be dead after all.

The thing is, most of the arguments for the public option that I've seen stop at "everyone gets insurance", and this isn't enough to convince some people. Those who are insured probably want to know why they should have to pay for this, in addition to what they have already.

If you are one of those people, this post is for you. I'm going to explain how the public option will benefit you even if you have private insurance and want to keep it.

1. You already pay for uninsured people, and I don't just mean this in a vague sense of "everyone is affected by everyone else", either. Most of you reading this probably pay taxes, and some of that tax money goes to fund public "safety net" hospitals in areas with lots of low-income and uninsured people.  Every time someone uses these hospitals and can't pay the bill, your taxes pay it instead.

As Rep. Virgina Foxx has pointed out, all hospitals have to treat anyone with a medical emergency, even uninsured people who can't pay. But someone has to pay those ER bills... and if you've got insurance, that's you. To offset the cost of treating uninsured people for free, hospitals charge more for their service to insurance companies, who pass it on to all of their customers in the form of higher premiums.

Some of the things that land uninsured people in the ER are not only completely preventable, but can also leave them unable to work, possibly for life. If they can't work then they'll need Social Security and other government programs to support themselves, and you pay for that too.

2. Private companies ration care. All healthcare providers do this to some degree, because when you're providing a needed service that's in high demand, you have to set priories. The person having a heart attack gets to use the hospital facilities before the person who needs chemo - not because cancer isn't serious, but because it's unlikely to kill you within the next fifteen minutes.

Private insurance companies ration for a different reason. They don't save resources for people who need them more, they withhold them to increase their profits, and they've got a lot of creative excuses for why this is okay. Here's a few of them:
  • Your medical emergency isn't really an emergency. Even if your company doesn't require "pre-approval" for emergency services, they can define "emergency" to exclude things like random unexplained bleeding.
They can also do things like raising your premiums, changing the terms of your coverage, and charging you more for going "out-of-network". They do this because they can get away with it, and the reason they can get away with it is quite simple:

3. Private insurance companies don't have to compete, at least not like other businesses do. A normal business earns a profit by keeping their operating costs as low as possible, and by providing the services that their customers pay for. Without the second one, they usually won't be in business long no matter how low their costs are. This doesn't apply to insurance companies, and this is because they've got a de facto monopoly  an actual monopoly since the rules don't apply to them.

If you get insurance through your workplace or a similar arrangement, you're not going to give that up for an individual plan that can be rescinded anytime - assuming you can find an affordable plan that will cover you in the first place. Even if you could, nothing would change because they all use the same underhanded cost-cutting tactics. And unless you can afford to pay for everything out-of-pocket, you need to have insurance, so you won't leave. They know that, and if they ever do anything for you, it's not because they value your business. It's because you might sue them and win if they don't.

If we had a public plan that anyone could join, they'd have to stop taking your business for granted. The cost-cutting bullshit won't be profitable once it starts driving away customers, and so a good amount of it would stop.

4. Companies that don't compete for your business don't innovate. It wouldn't make sense to. Why should they put time and money into improving their services, when their goal is to not provide service? They're doing that just fine as it is, thanks.

This means that insurance companies - and the doctors and hospitals who work for them - simply don't innovate much. Even if someone else's research finds a way to will improve healthcare quality, it won't catch on quickly (or at all) if it's expensive to adopt and doesn't provide significant benefits - "benefits" meaning profits. Electronic medical records are a good example of this, and other advances don't fare much better. They don't have to care about the best way to treat a medical conditions, when they can simply avoid covering or treating people who have it.

A public option would not be able to do this, and so it would have to innovate. It would have plenty of motivation to provide efficient service and effective treatment,  and avoid wasting money on things that don't work. As the public plan innovates, the private companies will quickly follow - because if they don't, you can choose to stop giving them your money.

5. Conclusion

Even if you have private insurance that you like, and no intention of ever buying a plan from the government, a public option will still benefit you. Your premiums will no longer be paying for other people's ER visits. You insurance company will get better, because they'll have to stop thinking up stupid reasons to deny payments, and start doing things to show you they're better than the public plan. They'll have to start treating you like a valued customer and earning the right to your business, instead of simply taking your money and giving as little as possible in return.

If you like this idea, call you senators.  Tell them you want the public option back, and that they should pass it through reconciliation. If your senator's pro-reform then you'll encourage them to act more quickly - and if not you'll be giving them an idea of how many votes they're going to lose.


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