As expected, the debate over health care reform is now centered on whether or not the public should have the option of enrolling in a Medicare-like plan financed and administered by the federal government. Last week, President Obama sent a letter that expressed his strong belief that "Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest."
Obama's decision to stake out a firm position in support of a public plan resulted in an immediate backlash from Republicans, dampening the already diminishing chances that health care reform will have substantial GOP support.
In the meantime, the Senate Health, Education and Labor and Pensions Committee, chaired by Senator Ted Kennedy (D-MA), has released a summary of its health care reform proposal, which includes a requirement that the public be offered a qualified public plan that would set "provider reimbursement at Medicare rates plus 10 percent. The government plan would be deemed to be licensed in each state. Premiums must be sufficient to cover the costs of the government plan."
For liberal and conservative true-believers, the debate over a public plan has become a surrogate for the broader debate over the role of government in our health care system. If you believe that the government needs to take on more responsibility for financing and organizing health care in the United States, you want a public plan. (Many of those who favor a public plan option would like it to be the only option - like Canada - but have decided that this is the best they can get right now.) If you believe that the problem with American health care is too much government and not enough private initiative and responsibility, then you are opposed to a public plan.
Largely missing from the discussion, though, are the details of the "it" that everyone is arguing over. There is general agreement among policy wonks that the current Medicare payment structure is dysfunctional - it undervalues primary care and rewards volume instead of value. If so, then, does it make much sense to create a new public plan that takes this same flawed payment structure and add 10%?
Would there be safeguards to ensure that payment rates under the public plan are competitive with private insurance and high enough to ensure sufficient participation by physicians and other "providers"? Or would it end up looking more like Medicaid, where low levels of payment have resulted in low levels of physician participation and generally, poor access to care?
Medicare also does not cover most preventive services. Does it make sense then to replicate this same benefit structure in a new public plan?
One could imagine a public plan that is better than Medicare. It would pay primary care doctors more, create incentives for value, rather than volume, and cover preventive services that largely are left out of Medicare. It would pay enough to ensure sufficient participation by physicians. It would compete with qualified private insurers, but on a fair playing field.
It is legitimate to raise ideological or philosophical points for or against a public plan. But at some point the debate needs to move from philosophy to defining the "it" - what kind of public plan are we talking about? Only then can voters, most of whom are principled pragmatist, make a decision on support.
Today's questions: Should the public be offered a public plan? And if so, should it look like Medicare? Or something different and better?