The Obama administration hopes to give all Americans the option of buying into a public, Medicare-style health insurance plan. That is now shaping up to be the biggest flash point in the emerging debate about healthcare reform.
Advocates of a Medicare-style plan say it would give consumers a lower-cost alternative to private insurance, forcing those private insurers to become more responsive to consumer needs. Opponents counter that it would undermine the private health insurance market by prompting millions of businesses to switch to the cheaper, public alternative. In the long term, they argue, that would undermine consumer choice in healthcare.
Lawmakers and their staffs are currently hammering out the details of reform legislation that is expected to go to the floor in June. But interest groups on the right and left have already begun a fierce ideological battle, with each side trying to shape the public’s perception of a public insurance plan.
A coalition of conservative groups led by The Heritage Foundation just issued a list of “six deal killers” for healthcare reform. Top on their list is the creation of a public health insurance alternative. On the liberal side, Howard Dean is leading a grass-roots campaign and petition drive with groups like MoveOn.org and Democracy for America to support a Medicare-for-all-type alternative in any reform legislation.
“This is a relatively new idea. It’s not completely framed in the public’s mind yet, and so the debate could shape where people finally come out on the idea,” says Robert Blendon, a political and healthcare analyst at Harvard’s School of Public Health. “Initially, people are very favorable to the idea of a choice that could get them good medical care at a lower price, but they haven’t thought about the implications yet.”
In the past, opponents have swung the public
Currently, a few polls show that more than 70 percent of Americans support the idea of having a choice between a private and a public health insurance plan. But as history has shown, that could change dramatically.
In 1992, when President Clinton first outlined his Health Security Plan, more than two-thirds of Americans initially supported the idea. Then, the health insurance industry launched a massive advertising campaign opposing the plan. Within a year, support had plummeted along with any chance of healthcare reform.
Similarly, in 1945, when President Truman proposed a national health insurance plan, 75 percent of Americans were in favor. But after the US Chamber of Commerce and medical groups attacked the plan as “socialized medicine,” support sank to just over 20 percent.
“It really matters how each side gets their ideas out there and frames the debate – both sides are trying to influence bloggers and columnists to lay the groundwork for how people see it,” says Professor Blendon. “On one side, it’s framed as a terrific thing that will lower costs and give you more options. On the other, it’s painted as something where people could end up in a straitjacket of government-directed healthcare.”
Impact on consumer choice
Opponents of a public health insurance alternative, such as the Health Policy Consensus Group, the conservative coalition that issued the list of “deal killers,” contend that the government would use its “regulatory, pricing, and taxing authority” to favor its own plan. The group says that would make it difficult, if not impossible, for private health plans to compete and consumers would eventually find themselves without private insurance alternatives.
“If Obama sets up a public plan, and then he sets up an employer mandate on top of it – where all of the economic incentives are designed in such a way that employers will start dropping people by the millions out of their existing private plans – there is no way Obama keeps his promise that everyone can keep their current health insurance,” says Robert Moffit, director of the Heritage Foundation's Center for Health Policy Studies.
A Rasmussen poll in December 2008 found that 58 percent of Americans would oppose a public plan if they thought it would undermine their present private insurance policy.
Supporters of the public insurance option charge that conservative groups are "blatantly" misrepresenting Obama's plan and exaggerating its impact on private insurers. “There will always be people who want private insurance, and this system allows them to have it,” says Dr. Dean, founder of Democracy for America. “It would be like what everyone over the age of 65 already has: You’d be able to choose your current plan, or you could choose a public option like Medicare.”
The presence of a public health insurance plan will not drive private insurers out of business, say advocates such as Dean, but force them to become more efficient and responsive to businesses and consumer needs because they’ll have some competition.
While each side gears up for battle, some health-reform advocates are concerned that inflexibility on this issue could damage the overall goal of reform.
“It’s one thing to seek strong and broad support for different faces of healthcare reform, but it’s another to draw hard lines in the sand. That demonstrates a reckless disregard of the American public’s need for meaningful healthcare reform,” says Ron Pollack, president and CEO of Families USA, a health-reform advocacy organization in Washington. “Clearly, on the very difficult issues that are at the heart of healthcare reform, there needs to be a willingness to search for common ground instead of a knee-jerk rigidity.”