Public Health Insurance

Public Health Insurance Option Key to Obama Healthcare Plan

If Congress passes Obama's plan and Americans are given the choice of a public health insurance option similar to Medicare, we could all save up to 30% on our health care premiums. That's a huge savings, and we'd still get high-quality coverage and be able to choose our doctors.

And even if you choose to keep your current insurance, you'd save anyway. HMOs and big insurance companies are the only game in town right now—so they overcharge us to boost profits and pay out CEO bonuses. If Obama's plan passes, they'd have to compete with it, and their prices would have to be more honest.

Lower premiums for us means lower profits for them, so insurance companies are putting extreme pressure on Congress to drop the public health insurance option. But Americans deserve to have this choice—and it's necessary to help rein in out-of-control health care costs.

Imagine how different things would be if we all had quality health care that costs up to 30% less than what we're paying now. Would you use the money toward college for a child? A safe retirement? Or maybe you'll finally be able to afford the treatment or medicines you need.

The simple truth is that having the choice of a public health insurance option would make all of our lives better. Here's why:

Health care costs are spiraling out of control. From 2000 to 2008, health insurance premiums increased five times faster than wages.

A public health insurance option would provide an affordable, quality alternative. Two new studies show that Americans could save 25% or more off of a traditional private plan. The New York Times says this would "keep the private plans honest."They'll have to lower rates and offer better value to compete.

Plus, a public health insurance option would be reliable coverage for all.

Private insurers are notorious for dumping people with little notice. A public option would allow consumers who've been dropped—or just don't like their current coverage—to switch to a steady public choice.

Thankfully, the public health insurance option is gaining steam in Congress. The 77-member Progressive Caucus recently endorsed the policy. And the chairmen of five critical congressional committees came out in support. Now we need to get the rest of Washington on board. Click below to

Health Insurance Bailout

Is There a Health Insurance Bailout in our Future?

Governments have short time horizons. Faced with a long-term problem such as the actuarial bankruptcy of Social Security, it almost always makes political sense to stall, to find some way of putting off the political costs of dealing with it. With luck, the problem may go away. If not, the costs will fall on some other politicians in the future. Now that Obama's health care plan has passed, he will be under pressure to produce results that look to most voters better than the past, or at least no worse. In the short run that should not be a problem, since most of the provisions of the plan are set well in the future. Most of the taxes to pay for it come into effect in 2013, the requirement that health insurance companies take anyone who applies, including those with pre-existing issues, in 2014, the tax on high end health plans in 2018. The fine for not having health insurance starts in 2014 at $95 or 1% of income, and reaches its full value in 2016. For the next few years, at least through the end of Obama's current term of office, the controversy over the plan will be mostly a war of words, without much evidence on its real consequences. Eventually that will change. If, when most of the provisions of the plan are in effect, it appears to be working very badly, if health insurance is more expensive than it used to be, if many younger workers find they are being required to spend a lot of money for insurance they don't want, there will be two political consequences. One is that the Democratic party, strongly identified with the changes, will suffer a decline in its reputation. The other is that whatever politicians are in office will look bad, since voters will blame current problems on those currently in charge. The obvious solution is to find ways of pushing the costs of the program into the future. Insurance companies take in money now in exchange for the promise of future payments. Under political pressure to charge less and promise more, they may adopt the policy followed by General Motors when it solved its labor problems by paying striking auto workers with the promise of future pensions: Make promises they cannot fulfill, in the belief that when the crunch comes the U.S. treasury will come to their rescue.

The Health Care Clock

The Health Care Clock, and Why Obama Has to Act Quickly

Universal health insurance won't happen unless Obama can light a fire under the Senate Finance Committee this week. Within the next two weeks, the Committee must report out a bill that contains a public option and a credible source of money (either limiting deductions of the wealthy to 28 percent or capping tax-free employer-provided health care, or some of both). Obama then has to get both the Senate and the House (which reports out a bill today) to approve their respective bills before August 7, when Congress heads home for recess. Why is timing so important? Because the health-care clock is ticking, and doesn't have many weeks left. Universal health care is so complicated -- touching on so much of the economy, stepping on the toes of so many vested interests -- that to allow the bills to languish past recess risks the entire goal. Speed is essential. Recall that after Bill Clinton was elected, universal health insurance looked inevitable; a year later, it was doomed. As Lyndon Johnson warned his staff after the 1964 landslide, "every day while I'm in office, I'm gonna lose votes." Republicans don't want any bill. Blue Dog Democrats are afraid of the costs of any bill. The AMA, private insurers, and pharmaceutical companies would be delighted if universal health care died. If bills aren't passed in the House and Senate before August 7th, the fights in both chambers over the public option and money will carry over into the Fall, where they'll become more intense and more prolonged. Obama won't have a bill on his desk before the end of the end of the year. That's a death sentence for health-care reform. The gravitational pull of the mid-term elections of 2010 will frighten off Blue Dogs and delight Republicans.