Tuesday, August 18, 2009

The Public Option

Flag On The Play. Offense. Illegal Removal of The Public Option. Penalty, 15 yards, 4th Down.

Recently the aforementioned "offense" (aka the Obama Administration) recently signaled that it is ok with ditching the idea of "The Public Option" in order to gain larger points with the general population on Health Care Reform. This comes on the heels of Obama, among other Democrats, effectively saying that "The Public Option" is a must-have, do-or-die, deal-breaker item that if not included vitiates the entire campaign for true Health Care Reform. Obama is not quoted as saying that "The Public Option" is but one piece of the larger Health Care Reform pie. While that may technically be true, it is notable to observe that "The Public Option" is a pretty damn large piece of that pie.

Just what is "The Public Option?"

Right now if you are among the lucky 249.8 million Americans (out of 305 million Americans total) who have health care insurance, you go to the doctor, you make your co-pay of $20 bucks or whatever it is, the doctor pokes and prods you for a while and then they send the bill to your insurance company, United Health Care, Aetna, Cigna, Blue Cross & Blue Shield, etc. These are all "private" insurance companies, meaning they are not owned or operated by the government, but instead are owned and operated by private citizens just like any other for-profit corporation in America. Your private insurance company, which takes a piece out of your paycheck every month in order to pool and invest it collectively along with everybody else in the country who is under their umbrella, then pays a % of your doctor bill to the doctor and you pay the rest. Sounds familiar right?

Well the "public" option is a proposal to have the federal government create its own health insurance company, just like a Blue Cross or a Cigna, only this one is not owned and operated by private individuals but instead is owned and operated by the federal government, just like Medicare and Medicaid. The rationale is, by creating this "public option" health care insurance company, the 47 million Americans without health insurance (either because they couldn't afford the private companies, or they have pre-existing conditions that bar them from the private companies, or because they are unemployed, etc.) would be able to take advantage of this new public health insurance company. The criticisms against doing this have been that the private insurance companies will not be able to compete with the federal government and will lose profits and/or go out of business, leaving many uninsured and ultimately making the "public option" the only option. Other criticisms have been the general fear of the idea of our federal government running health insurance period.

As Obama correctly pointed out during New Hampshire's town hall meeting on health care reform last week, private corporations compete with the federal government all the time with no trouble. Federal Express (private), UPS (private, and DHL (private) are all thriving businesses that compete with the United States Postal Service (public) every single day. The fact that the postal service exists as a "public option" for delivering mail has not driven the other private mail delivering companies out of business.

Furthermore, the general fear of the idea of our federal government running a health care entity is unfounded since the federal government is already running a few health care entities - namely, Medicare and Medicaid. And they seem to be doing just fine with no complaints from the many Medicare and Medicaid users.

Oh, and by the way, as a government-run entity, the salaries of the directors of a public option would be capped. For example, the diretors of Medicare and Medicaid make $150,000 a year. By contrast, William W. McGuire, the former director of United Health Care, made $124.8 million dollars in 2005 alone. When he retired on Dec, 1, 2006, he received an exit compensation package of $1.1 Billion dollars (billion with "B"), making history as the largest golden parachute in the history of corporate America. And people wonder why there is so much opposition to health care reform. This is big business, folks.

So why drop "The Public Option" for health care? For whatever the reason that the Obama White House decided to announce that it can reform health care without "The Public Option" I'm calling shenanigans. I think the Obama Administration is making a big mistake here, both practically speaking in terms of actual health care reform as well as politically speaking with the damage to Obama's political capital if health care reform is passed without one of the key components that Obama himself had been an advocate for all up until this past weekend.

Should Health Care Reform include a Public Option or not? Did Obama cave in to the critics here?
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