A recent article in the New York Times highlighted a proposal by Hillary Clinton to bring back the public option as part of the Affordable Care Act, described as a move to the left toward Bernie Sanders’ Medicare for All proposal. Her further suggestion was to consider voluntary buy-in to Medicare for people 50 or 55 years of age and up. Beyond the headline, there was no substance to her proposal.
Although she claims expertise in the health care area, Hillary Clinton has never developed a health care plan that would work to assure access to affordable quality health care. The Clinton Health plan in 1993-1994 was byzantine in its complexity and never got out of a House committee to a vote on the floor. Speaking to a group at Lehman Brothers Health Corporation in 1994, she called single-payer national health insurance inevitable if health care reform was not effective by 2000. Now she opposes that and maintains support for the Affordable Care Act (ACA), enacted in 2010, but with her suggested “improvements.”
As the ACA was being put together in 2008 and 2009, the public option was conceived as a way to inject more competition into the health insurance industry. As a not-for-profit option on the exchanges, it was thought that it would provide greater value of coverage at lower cost. Although initially part of the ACA as it worked its way through congressional committees, it was bitterly opposed and soon killed by private insurers and other corporate stakeholders in the medical-industrial complex. It was also opposed by the American Medical Association, even though most physicians and health professionals supported the idea. An expanded Medicare also drew intense opposition from organized medicine and hospitals, mostly due to fears of inadequate reimbursement.
Now enter Hillary’s 2016 claim that a public option and expanded Medicare buy in could improve the ACA and advance health care reform. Any chance of success? No way, if we look at evidence and experience!
For openers, both would again be fiercely opposed by the same opponents as before. A public option would not have worked before and will not work now by virtue of being too small and administratively more complex. It would be subject to adverse selection of sicker enrollees as private insurers continue to game the system in their own self-interest. Most of the not-for-profit co-ops started under the ACA have already died for these reasons. It is just a make-believe idea to think that a public option could increase competition today now that the industry has grown and consolidated to a point that just four or five insurers control most of the market. The insurance industry and its lobbyists would also kill early buy-in to Medicare without any trouble. Any thought that either a public option or early Medicare buy-in could be a transitional step toward single-payer is likewise out of the question.
We have to recognize soon that our present for-profit multi-payer financing system is actually a huge obstacle to reform. It is unsustainable become of its high costs and inefficiencies, its lack of price or cost controls, its restrictions on patients’ choices of physicians and hospitals, and its increasing unaffordability for a growing part of our population. We still have 30 million Americans uninsured six years after the passage of the ACA, with a similar number underinsured. Hillary’s proposals are unrealistic and naïve, as well as being inconsistent with her 1994 prediction of the need for single-payer financing by 2000 if reform had not been accomplished by then. Her latest proposal to resuscitate the public option as part of the ACA lacks any credibility, and she just seems to be posturing as an advocate for “reform.” Adding a public option to the ACA today would just put one more ineffective Band-Aid on an already flawed multi-payer financing system.
As early as 2009, when the public option was being debated and killed as part of the ACA, Drs. Himmelstein and Woolhandler, internists and professors of public health at the City University of New York gave us two reasons why the public option can never work in this country:
1. It forgoes at least 84 percent of the administrative savings available through single-payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians’ offices, and nursing homes, which would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the majority of bureaucratic waste. Hence, even if 95 percent of Americans who are currently privately insured were to join the public plan (and it had overhead costs of current Medicare levels), the savings on insurance overhead would amount to only 16 percent of the roughly $400 billion annually achievable through single-payer — not enough to make reform affordable.
2. A quarter century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry picked healthier seniors, and have exploited regional health-spending differences to their advantage. They have progressively undermined the public plan — which started as the single-payer for seniors and has now become a funding mechanism for HMOs — and a place to dump the unprofitably ill. A public plan option does not lead toward single-payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan.
In the current important debate over the future of health care in this election season, we need a well-informed electorate on the issues. The media are derelict in not drilling down on the advantages and disadvantages of the three major alternatives to health care financing: 1.) continuation of the ACA with improvements as necessary; 2.) a Republican replacement plan, still in the works, after the ACA is repealed; and 3.) single-payer national health insurance, Medicare for All, as proposed by Bernie Sanders, coupled with a private delivery system. We need integrity in proposals and fairness and accuracy in reporting to the public if we are to achieve the goal of universal access to affordable health care for all Americans.
1. Rappeport, A, Sanger-Katz, M. Hillary Clinton takes a step to the left on health care. New York Times, May 10, 2016.
2. Clinton, H. speaking to a group at Lehman Brothers Health Corporation, June 15, 1994. As reported by Health Care for All-WA Newsletter, Winter, 2015, p. 9.