The Public Option: A Balanced Threat

There are huge volumes of money at stake with regard to the whole health care debate. We are dealing with a system that has so many interlocking components that taken as a whole, it obviously commands a major chunk of the nation's economy. One very large bone of contention is the "Public Option". In a nutshell, it means using some measure of public funds to craft a government insurance plan to pay for some portion of the public's health care. In so doing, it also means creating a new non-AHIP (America's Health Insurance Plans) insurance player. AHIP being a private health insurance lobbying group. And that idea, of course, is not sitting well within it.

A public option for health care payment would serve as a movable fulcrum that tilts a balance beam which at one end is the public's need to viably pay for health care while at the other is the profit motive of the insurance companies. By sliding this fulcrum one way or the other one can induce a degree of tilt or balance in the system while still staying within an overall market based framework. This would be done by deciding how the parameters of the public option are set. At a minimum then, the public option would be a mechanism for keeping the big insurance houses honest by including only those folks they've heretofore shunned. But in doing this it also makes a "threat to profits" entity suddenly camped just outside the gates. At the other extreme though, it could make the whole healthcare system into a privately owned publicly regulated utility. The same threat obviously carried forward. In either case, it has a bearing on just who calls the shots and just how we define fair play.

Let's not kid ourselves, the whole point of anything market based is to make money first. You can spend scads of cash on P.R. efforts to try and convince everyone "it ain't so". Yet were that the case, would there even be a healthcare debate? Now generally, as long as there is a non-clubby and non-captive market, there is a good chance that really useful products will emerge symbiotically with the money making. That said though, money making is still the, if you will, bottom line. Dealing with peoples healthcare costs then is simply the vehicle through which money is being made. Love of the customers can vary greatly but like any other business; if you stuff as much money in as you can and pay out as little as possible, you'll keep your stockholders happy. Ask any CEO and they will let you know that this is still job one.

Now, when that market mechanism fails to fill the public need, then the public is left with two choices. It can either tweak the market to fill its needs, or it can take the market completely out of the equation and do the whole thing itself, I.E. "socialize" it. The public option works within a market framework. So despite all the hysteria about the public option being "socialized medicine", it's very existence would be proof that it is not. Under real socialized medicine, the healthcare professionals would be government employees while all the facilities, hospitals and the like, would be government owned. So the public option then is simply a mechanism by which government, as in we the people, tweak the insurance market to provide a needed public good. That being, of course, allowing the citizenry to viably pay for market based healthcare. This then really makes the public option more of a piece of healthcare insurance reform as opposed to anything medical or even political; all contrary propaganda aside. Interestingly, according to a September 09 Urban Institute paper¹ siting some Congressional Budget Office letters to certain members of Congress, along with doing what seems some reasonably straight forward arithmetic, finds that the currently proposed public option would only apply to about 4.3 percent of the non-elderly picture. This is what the public option fulcrum makes our beam look like when it's set to a minimum position, maybe lightly tilting toward the public good. Just how aggressively we the people decide to ultimately tilt this beam though would however be open to negotiation. Not like it is now.

So should the public option fail, or not even come into existence, we could then be looking at an actual European style takeover of the entire healthcare system. The public is already quite steamed over the existing system's cost structure and it's not likely to suffer with another failure for very long. Indeed, an insurance lobby victory here would no doubt be short lived and could soon usher in its own complete annihilation. Those fighting it now maybe should consider this point carefully.

Finally though, one note of caution. With all the above said, to mandate all people go out and buy health insurance and then not have a public option, equates to welding a fulcrum under our beam at such a rakishly profit making angle that even Hercules couldn't budge it.

¹ http://www.urban.org/publications/411952.html Current Health Reform Proposals: No Government Takeover of American Health Care. By Stan Dorn and Stephen Zuckerman.