By Dwight Owen Schweitzer; Published February 16th 2010
First some facts, which are often obscured in the propaganda inundating the public consciousness: Medicare is the most efficient, cost effective, proven system for the delivery of quality healthcare existing in the United States today and we have had over 30 years to work out the ‘kinks’ in that system. The 15% of each premium dollar in the private sector which goes to administrative costs and profits are replaced in the Medicare system by roughly 2%, and that solely for administrative costs.
It is therefore not difficult to understand why the insurance lobby fought so hard against the inclusion of a ‘public option’ in any bill? The answer lies is in that disparity and to some degree it is hard to see how the private sector could compete against a program that delivers at least equivalent care and does so for 13% +/- less.
What seems to have been left out of the debate is that the pricing for Medicare is a function of Congress. To cut to the chase, I suspect that if Medicare were priced to the equivalency of private coverage the objection to a ‘public option’ would be greatly reduced if not eliminated, especially if the equivalency were built into the legislation so the private sector need not concern itself that what has been given today will be taken back tomorrow. The next issue is if the pricing is going to be roughly the same. why do we need to expand Medicare coverage at all. One thing to be kept in mind is that the premiums for universal Medicare could be scaled to income so that universal coverage could be available, even to those who cannot afford private plans at any price.
As the Medicare trust fund is due to go dry at some not to distant time in the future by all estimates, the increased revenues by increasing over the 2% administrative costs would go to fund those who cannot afford coverage, replacing Medicaid, and the balance would revitalize the trust fund’s financial stability into the farther future. The essential terms of what I propose (knowing that the devil is always in the details) are that universal Medicare premiums would be graduated to a percentage of income and would go negative (i.e. be free) to those below certain income levels based on family size. For those with the ability to afford Private coverage, Medicare would simply be another choice competitively priced. However the concept of competitively priced would have some regulatory strings attached which, while not the equivalent of price controls would be in place to insure (pardon the pun) that the profit margins of the private insurers were kept at an acceptable level by keeping the new Medicare premiums at a price point to encourage the private sector to be competitive or risk having Medicare be the insurer of choice.
The most significant aspects of the approach I recommend is that the Presidents commitment that those who want to keep their present coverage could do so, as they would not be enticed away by the lure of significantly cheaper coverage offered by this public option. To those who receive coverage from their employers, those benefits should be taxed as they are benefits in lieu of income and should be treated as such however the tax imposed should be restricted to funding the new universally available Medicare benefits to keep it solvent while enabling it to replace Medicaid as coverage for the poor. It should be noted that many doctors and medical practitioners who will accept Medicare patients will not accept those covered by Medicaid and the standard of care presently offered to those on Medicaid is often sub standard at best.
The governance of this program should be in the hands of a Medical Cost Regulatory Commission who would be charged with the responsibility of establishing premium rates and reimbursement rates for those opting to use Medicare and should have within it’s membership significant representation from the private sector of the industry to be certain that their voices are heard and their lobbying efforts are conducted in the forum where they belong and not in subsidizing the campaign coffers of those who legislate their interests in the halls of congress.
By taking the significant profit disparity out of the present ‘public option’ debate while keeping it in the legislation would have the effect of acting as a moderating factor on the avarice of the insurance industry. It is worth noting that the pay out per-percentage of each premium dollar has declined steadily over the past 20 years from 95% to 85% more or less, a statistic that justifies the concern to keep the insurance industry competitive on a fairly level playing field on the one hand, while having in place a system that serves to keep their avarice in check and the playing field being one on which everyone has the chance to play.
This is the kind of compromise bill that could come out of conference between the house and senate versions, and it is simple enough to explain to the public so that the purveyors of disinformation who had such a field day up to now in manipulating the facts and distorting the truth, will have a much tougher time confusing the electorate who will now know that when their time comes to access traditional Medicare, it’s availablity will be enhanced by this approach. By simply including graduated premiums in the public option, it will offer the added benefit of substantially lowering the projected federal budget deficit estimates of what has been proposed by both the house and senate bills in the process.