Thread: Would a Public Option Really Reduce Health Care Costs?

With the Republicans posturing for repealing the reform passed by Democrats last year, I remember hearing that many were upset it did not have a public option in it. How many of the PH folks believe that the public option was still the way to go for reducing costs?

If the real goal is to “compete” with other insurance companies and take profit out of the equation, I say it would not reduce costs. A group promoting the public option in 2009 made a misleading ad which caught the eye of Factcheck.org. Here is what they said: Pushing for a Public Plan | FactCheck.org

A TV ad by Health Care for America Now asks, "What if we stripped away the 13 billion dollar insurance company profits?" Our answer: It wouldn’t make much of a difference. The ad fails to mention that the figure represents six-tenths of 1 percent of all health care spending. And profits wouldn’t necessarily be eliminated or reduced by the creation of a public insurance option.

The fact is that health insurance profits amount to about 0.6% of the total amount we spend on healthcare. So, how is it that a public option intended to compete with private health insurance companies would really reduce costs?

With the Republicans posturing for repealing the reform passed by Democrats last year

We need health insurance for every American citizen. I want the package to be right. I disagree with many Republicans on this.
I see both sides.

Thanks for your well-reasoned response, Prag. Sorry for the late reply.

Originally Posted by Pragmatist

First of all if you are going to try and tell me that out of every dollar Insurance companies make on health ins they only pocket 4/10's of one cent, I don't believe you.

I believe FactCheck on this. Could you explain why you don’t believe it?

Originally Posted by Pragmatist

But more importantly, their profit has very little to do with why we need something like a public option.

There were those (and I believe still are) who used “their profit” as an argument for the public option. I’m glad you don’t see it that way.

Originally Posted by Pragmatist

GW alluded to it when he spoke of a bubble and that bubble is the rising number of people in this country that do not have health insurance. You see, in a civilized society everybody who gets sick has to be treated and that cost money. When 20% of the population does not have coverage and can't pay the bill, someone else has to. Whether it be some of your tax dollars going to subsidize hospitals losing money or the hospital charging more for their services and insurance rates going up to cover it, you pay for it.

The problem is as obvious as one could possibly be and it's the rising number of uninsured, if you aren't going to address that you aren't going to fix the problem. As that number goes up so will insurance rates and the number of people electing to drop coverage. The vicious cycle will continue until someone comes up with a plan to cover everyone. The republicans don't seem to get this but as more and more people become uninsured, I think the people will start voting more and more for the candidate that has a plan to provide it to them.

Yet, the cost per year of the uninsured, based upon a study I read, is about $35 billion per year. Again, this is a small percentage of our overall health care spending. Granted, this was for 2001, however, the estimated uninsured was over 40 million. Here is the study: How Much Medical Care Do The Uninsured Use, And Who Pays For It? — Health Aff

Using two independent sources of data, we estimated that uninsured people received $35 billion in uncompensated care in 2001…

No, this is not increasing our health care costs as much as other factors, but it seems to be an often-used reason for furthering “insurance for all” political agendas.
I think a larger reason for our increased costs is from advancements in technology, which Spooky seems to allude to in reference to “complexity” increasing. The CBO even did a study and determined that “Technological Change” is a main factor in driving up costs. I will post a link to the study in a reply to Spooky.

We are doing very little to work this problem from the root causes. We seem to just be trimming around the edges, since it is easier. Real long-term good change would be more “painful” for a certain amount of time and no politician wants to be involved with such “pain” during their term.

Originally Posted by Pragmatist

If the plan were aimed at providing full coverage to everyone AFTER a reasonable deductible you would cut 90% of the medical claims the plan would be responsible for paying. If the plan included a paycheck deduction similar to your witholding it could be a deduction less than what your current healthcare deduction is right now. That would put a stop to rising costs because your hospitals are no longer going to be performing 10 MRI's and only getting paid for 6 or 8.

If you don't like the deductible and want to pay for a private plan tailored to cover that initial deductible amount I am sure there would be private insurance companies willing to sell it to you and it would not be expensive because they know they will never get hit with bills exceding whatever the "Federal" deductible is.

The right can scream and cry socialism all they want but the problem isn't going away until someone fixes it. This isn't the 13 colonies anymore, it's a nation of 300 million and our healthcare system is no longer working. The rest of the civilized world has figured it out but we have an arrogant and ignorant contingent known as republicans that refuse to believe it. If a republican would accept that a public option is the only solution and try to make that deductible as large as possible to reduce it's cost, I will say there's a conservative with common sense.

You are right; the problem is not going away. I think you make some good points and I like your ideas about the deductible. We need to get away from an employer-based system, though. I say the problem is not going away because we are not taking a better approach and actually working the problem by looking at the real sources of the problem. I don’t see the public option as the only solution.

We should look at ways to reduce costs by considering smarter methods for implementing new technology, and finding ways to fix the FDA and approvals process, etc. Let’s not have the government further intrude into the market than it already has and does. I just don’t see that as a fix that will work long term.