By Rep. Lynn Woolsey (D-Calif.) - 07/13/10 10:42 PM EDT
We need to follow this initial step with an even longer stride into history by establishing a robust public option that would increase competition in the health insurance industry and rein in costs.
This week, I will introduce a bill to do just that, and it already has 115 co-sponsors.
The robust public option was a flashpoint during the long debate on healthcare last year.
Progressives argued at that time that the public option is the best way, short of a single-payer system, to make healthcare available and affordable to those who don’t have it and keep it affordable for those who do.
That argument still rings true, but in this time of rising concern about deficits, the robust public option offers other compelling advantages.
According to the Congressional Budget Office, the robust public option passed by two House committees last year (paying Medicare rates plus 5 percent) would save the government $110 billion over the first 10 years of its life.
While these savings could be invested in making insurance within the exchange more affordable, they could also be used to help reduce the deficit or as “pay-fors” for other bills Congress may consider.
In other words, the public option is a ready-made offset that could help pay for a variety of projects.
In this economic climate, a bill that can reduce the deficit or offset costs certainly deserves consideration.
If it can cut costs while also improving healthcare, it deserves to be passed.
And that is exactly what a robust public option would do.
The power of the public option lies in the lower-cost competition it would offer private health insurance plans within the health exchanges.
It could charge lower premiums because it would not be profit-driven and would have much lower overhead than private insurers. Medicare’s administrative costs, for example, are estimated to account for 2 percent to 5 percent of premiums compared with 25 percent to 40 percent of premiums in the individual insurance market.
By offering a lower-cost alternative, the public option would make it easier for the uninsured to purchase coverage.
It would also help those with insurance by forcing the insurers to control premium costs in order to compete.
Such a public option is not “a government take over” of the healthcare system, as critics falsely charge.
The public option would be one insurance option, alongside private health insurance plans. The public plan would compete with the private health companies to get people to enroll.
The public option created by my bill is nearly identical to the versions reported out of the House Ways and Means and Education and Labor committees during last year’s debate on the healthcare reform bill.
The only changes to the language are to make it fit within the health exchanges set up in the Affordable Care Act.
As such, it is not, however, déjà vu.
With the foundation of healthcare reform now passed but rising premium costs and a challenging economic climate continuing, the public option is an idea whose time has come.
Rep. Woolsey, is co-chair of the Congressional Progressive Caucus and president of Americans for Democratic Action.