Watch out for "public health plans" that aren't

Iowa Independent posted a piece by Congressional correspondent Mike Lillis today: “Grassley leaves door open for government health care plan.” Lillis was on Grassley’s conference call with reporters today and heard the senator say this about a public health insurance option:

I think right now there’s a lot of people, including me – I’d prefer it not to be in [the bill]. Then there’s a lot of people that say, well, it’s got to be in or [there’ll be] no bill. And then there’s a dozen ways to look at possible compromises. And I think before I would write [it] off completely, I would want to look at what those possible compromises are.

I do not interpret this comment as a sign that Grassley is open to a government health plan. It sounds to me like he is working with Senate Finance Committee Chairman Max Baucus on a compromise that might be called a “public plan” but would not force private insurers to compete against a government plan like Medicare for All.

As Bleeding Heartland user ragbrai08 has noted, lots of things that could be characterized as a “public option” fall short of what we need.

Perhaps Americans would be allowed to buy into the health insurance program for federal employees, which is provided by various private insurance companies.

Lillis noted that during today’s conference call, Grassley suggested the federal government is not competent to “run a government-run health insurance plan in competition with the private sector […].” I read this to mean that Grassley is still working overtime to keep a public health insurance option out of the Senate’s health care legislation.

Here’s hoping Senate Democrats who understand the need for a public option are able to prevail with Baucus.

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  • Grassley is talking out of both sides of his mouth...

    Thomas Beaumont has an article in the Des Moines Register today.  The Social Security and Medicare trustees just released a report saying both programs would be bankrupt sooner than previously thought.

    The title gives it away:

    “Grassley: Shaky entitlement finances show risk of public health plan”



    Well, former Labor Secretary (and former Social Security/Medicare trustee) Robert Reich also has something to say on the issue, below.  Reich is right, Grassley is wrong:

    « Obama on Health Reform: The Dog That Didn’t Bark | Robert Reich’s Blog

    The Truth Behind the Social Security and Medicare Alarm Bells

    May 13, 2009, 8:01AM


    What are we to make of yesterday’s report from the trustees of the Social Security and Medicare trust funds that Social Security will run out of assets in 2037, four years sooner than previously forecast, and Medicare’s hospital fund will be exhausted by 2017, two years earlier than predicted a year ago?

    Reports of these two funds’ demise are not new. Fifteen years ago, when I was a trustee of the Social Security and the Medicare trust funds (which meant, essentially, that I and a few others met periodically with the official actuary of the funds, received his report, asked a few questions, and signed some papers) both funds were supposedly in trouble. But as I learned, the timing and magnitude of the trouble depended a great deal on what assumptions the actuary used in his models. As I recall, he then assumed that the economy would grow by about 2.6 percent a year over the next seventy-five years. But go back into American history all the way to the Civil War — including the Great Depression and the severe depressions of the late 19th century — and the economy’s average annual growth is closer to 3 percent. Use a 3 percent assumption and Social Security is flush for the next seventy-five years.

    Yes, I know, the post-war Baby Boom is moving through the population like a pig through a python. The number of retirees eligible for benefits will almost double to 79.5 million in 2045 from 40.5 million this year. But we knew that the Boomers were coming then, too. What we didn’t know then was the surge in immigration. Yet immigrants are mostly young. Rather than being a drain on Social Security when the Boomers need it, most immigrants will be contributing to the system during these years, which should take more of the pressure off.

    Even if you assume Social Security is a problem, it’s not a big problem. Raise the ceiling slightly on yearly wages subject to Social Security payroll taxes (now a bit over $100,000), and the problem vanishes under harsher assumptions than I’d use about the future. President Obama suggested this in the campaign and stirred up a hornet’s nest because this solution apparently dips too deeply into the middle class, which made him backtrack and begin talking about raising additional Social Security payroll taxes on people earning over $250,000. Social Security would also be in safe shape if it were slightly more means tested, or if the retirement age were raised just a bit. The main point is that Social Security is a tiny problem, as these things go.

    Medicare is entirely different. It’s a monster. But fixing it has everything to do with slowing the rate of growth of medical costs — including, let’s not forget, having a public option when it comes to choosing insurance plans under the emerging universal health insurance bill. With a public option, the government can use its bargaining power with drug companies and suppliers of medical services to reduce prices. And, as I’ve noted, keep pressure on private insurers to trim costs yet provide effective medical outcomes.

    Don’t be confused by these alarms from the Social Security and Medicare trustees. Social Security is a tiny problem. Medicare is a terrible one, but the problem is not really Medicare; it’s quickly rising health-care costs. Look more closely and the real problem isn’t even health-care costs; it’s a system that pushes up costs by rewarding inefficiency, causing unbelievable waste, pushing over-medication, providing inadequate prevention, over-using emergency rooms because many uninsured people can’t afford regular doctor checkups, and spending billions on advertising and marketing seeking to enroll healthy people and avoid sick ones.