The need for a robust public option

The true test of a healthcare system is how effectively and affordably it delivers care, not how profitable it is for business. Around the country, we see millions of people with inadequate or no coverage, families who go to sleep at night knowing they are one serious illness away from bankruptcy, and rising ranks of the unemployed who face going it alone in the prohibitively expensive individual coverage market — or worse, going without insurance at all. So, while insurance companies have unabashedly experienced record profits, it is clear that our healthcare system is failing.

Because of the current upside-down approach to healthcare, I have long advocated for a single-payer system, the most effective and least costly way to provide everyone with quality care. Unfortunately, the political winds have drifted away from single-payer.

Today, the road to refocusing our misguided healthcare approach to put patients and doctors, not corporate bottom lines, at the forefront, and ensuring that all of us have access to the health services we need for a price we can afford, runs through a robust and competitive public health insurance option.

The public option must be robust and competitive, and incorporate, at a minimum, the following principles:

• Effective immediately. The public health insurance option cannot merely be a “fallback,” a “trigger,” or some other dubiously named mechanism out in the future. A trigger proposal, like the one in Medicare Part D, will do nothing more than ensure that the public option never happens.

A public plan in name only serves no one.  The public health insurance option must be a part of overall reform, and it must have a clear and unambiguous start date.

• Run through a government or independent agency. While it is heartening to hear the insurance industry tout its openness to oversight, merely setting up a marketplace with regulated private insurance options will not bring about the reform we deserve. To achieve true cost savings, create competition in the marketplace, ensure that people are getting the health care they need, and promote transparency in the private insurance market, we must establish an insurance option that is administered by a government agency or some other independent entity.  This is the only way to keep private insurers honest.

• Open to anyone. The public plan should be open to everyone, and not reserved only for those without insurance. Consumers should not be limited to the choice of their employers when it comes to their healthcare, and should be able to elect their employer’s private plan or the public insurance option.

• Based on Medicare. There is no reason to reinvent the wheel. Medicare’s existing infrastructure keeps overhead costs low (a miniscule 2 percent compared to private insurers’ 15-30 percent) and spending down (from 1997 to 2006, per-enrollee spending in private insurance grew 59 percent faster than spending in Medicare), and should be available for the public option.

Moreover, to ensure that the public option does not operate at a disadvantage with respect to private insurers, it must be able to use Medicare’s preexisting payment structure and physician base as it transitions to being a self-sufficient plan. And this should not scare providers who know that Medicare is a timely payer who pays in full — the same cannot be said of private insurers.

• Competitor in the marketplace. The public option should compete in the marketplace like private insurers and should become reliant on collected premiums to cover costs. Similarly, the public plan should be able to use its purchasing power — for medical services, pharmaceuticals and durable medical equipment — to establish or negotiate rates the same way private insurers can.

• Instrument for innovation. If deemed necessary by the overseers of the program, the public plan should be able to offer rates to providers that exceed Medicare rates in order to remain competitive and spur use of innovations, such as e-records, medical homes, strengthening home-based care, and implementing cultural competency programs and translation services.

• Accompanied by additional reform measures. A robust public option cannot, on its own, repair our healthcare system or ensure that services are delivered in a more effective or efficient way. In conjunction with the public option, we must establish a baseline of coverage that includes necessary care such as mental health and prevention measures. We must move toward community-based rating, and we must end discrimination against pre-existing conditions, gender and geography by requiring guaranteed issue. We also must do more to support and grow the medical workforce — from primary care physicians to nurses to home health workers — because no amount of coverage can do any good if there is no one to deliver quality care.

To some, this plan may seem monumental, impossible even. But President Obama is right that we have a unique opportunity to do something remarkable this year. We have an opportunity to make fundamental changes to the way we view healthcare and deliver services, to implement a robust public health insurance option that puts the patient before the quarterly financial report. That really would be monumental.  But, I hope, not impossible.

Nadler, a member of the House Judiciary Committee, is one of the members selected from the 80-member Congressional Progressive Caucus to help draft healthcare reform legislation.