Friday, July 31, 2009

The Public Option

President Obama is championing a "Public Option" to offer insurance to Americans. The government's Public Option is proposed to give Americans more choices and pressure traditional insurance companies to do better. Obama has stated that the Public Option would compete fairly with the private insurers on a "level field".

We all need to evaluate this issue. If the Public Option is subsidized by the government, then it will offer 'cheaper' premiums - even if its costs are really higher. If people can buy a government subsidized Public Option that may cover more with lower premiums, then how will private insurers survive? They won't over time.

So will the Public Option use the government's power to compete on a "level field" with private insurance?

Let's make this simple. One proposal states that the Public Option would pay healthcare providers 105% of Medicare rates. However, a Federal Court in Florida recently ruled that a private insurer must pay 239% of Medicare rates to providers. The Federal Court found that 239% of Medicare rates was fair and a reasonable market rate to pay providers. See Weinberger, et al v. Aetna Health, Inc., No. 1:2006-cv-20249).

So let's stop there. The Public Option will pay less than 50% of a fair market rate.

Is there any way the Public Option can be championed as another market based insurance alternative competing on a level field?

What will happen to private insurance as an option?

Where is the mature, responsible and thoughtful health reform we need?

Monday, July 20, 2009

Obama speaks out on health reform: Do his words match the reality?

The President just gave a pep talk for health reform but most of the speech was at odds with what is actually being proposed in the 'reform' legislation.

"The healthcare system is breaking families and businesses" but the current reform proposal doesn't include any major reforms that would decrease costs. In fact, the CBO estimates that costs are likely to GO UP under the current proposed reform.

And while our families and business are being financially broken, the current proposal adds taxes on families (only on the 'rich', maybe) and an unfunded mandate on business or an 8% tax on wages. Obviously increasing costs on families and business will not lower their costs. Did i miss something??

The President stated that we "cannot put off the hard work" required to achieve healthcare reform. But this is the biggest contradiction going. Clearly there are reforms that can help the healthcare system and the insurance system. They may even receive bipartisan support and public acceptance. But the current proposal is not the result of 'hard work'; it is a plan to spend money we don't have on a system that doesn't provide good value in the first place.

A proposal that simply spends money we don't have or make others spend money they don't have is immature and irresponsible. It is 'reform' for the headlines; not for the patients.

Absent from the entire conversation and proposal are the details that call for personal responsibility in the healthcare system, whether it is taking care of one's health or spending money wisely on necessary services. Clearly that is where the reform needs to start. The system is too expensive primarily because there is little personal accountability today. It will take a thoughtful, mature, and responsible leader to accomplish this. I hope the President or someone in Congress will step up to the challenge.