Ezra Klein vs Atrios: How Important Is the Public Health Insurance Option?

Ezra Klein has an important post assessing the relative importance of having a public health insurance option versus other reform elements. He concludes that there are at least five other issues that are even more important than whether the reforms include a public option.

Atrios replies by both agreeing and disagreeing, but ultimately concluding a strong public option is the essential component of a reform bill and the focus of rallying support.

They’re both right, but to see this, you have to distinguish between reforms we must do now to save lives under the current system and the foundations we have to lay to move to a restructured health care system.

Part of the problem is that it will take years to build the exchanges (called "gateways" in the HELP Committee bill) that Klein keeps mentioning. The public plan is an available choice within an exchange. Under the HELP bill, the Gateways are state-based institutions, which means each state/region has to establish one (or the feds intervene), and we know from experience this will take many years to get every state on board.

While I agree that the exchange concept is necessary (e.g., because some entity has to implement/enforce minimum standards, coverage requirements and eligibility), Ezra apparently assumes that the availability of the public plan occurs when an exchange opens. That means access to the national public plan depends on the progress each state makes in building an exchange. That’s a mistake.

The national public health plan should be created and become available independent of the exchange start-ups. People need to be able to choose the national public option as soon as possible – within 1-2 years — and not have to wait for their state to get its exchange running.

In the meantime, tens of thousand of people will die and/or suffer from untreated illnesses. Hundreds of thousands more will go bankrupt because they don’t have health insurance, can’t afford care because their underinsurance doesn’t cover it, or find they have fraudulent insurance from companies who have hired legions of people to make sure their claims aren’t paid and their health problems aren’t covered by the insurance they thought covered them.

That means that regulations outlawing the most egregious insurer practices — exclusion for prior condition, rescission, unwarranted price discrimination, excessive co-payments and limits on total out-of-pocket costs, etc — are absolutely essential immediately, regardless of how the public plan debate is resolved.

So whether we’re building a single payer system or building a hybrid or transitional system that includes exchanges and a public plan that, through people exercising choice, could move in that direction, we have to have other interim reforms enacted immediately to reduce the deaths and financial hardships imposed by the current system.

Some of Ezra’s "more important" elements address this need. He argues, for example, that we need to expand Medicaid and the number of people eligible for it, not because Medicaid is a great system — it’s not and it varies state to state — but because it’s in place and we can quickly move 10 million low-income, uninsured people into it. This is needed triage.

We can also start requiring insurance, not because an individual mandate, reenforced by an employer mandate and contribution ("play or pay") is a good long-run solution — it’s not — but because we can get additional millions covered with something and subsidize their premiums. The size of, and eligibility for, the subsidies determine how many people get covered — that is, how many millions of people don’t go bankrupt, die or suffer from untreated illnesses. This is more essential triage, and as Klein notes, we need to advocate more liberal rules for providing these subsidies.

For the intermediate-to-long run, Ezra has been right to focus on building the exchanges. And he now sees that if the exchanges are going to be the mechanisms by which the public plan puts strong competitive pressure on private insurers to shape up or lose market share, there must be an "open access" rule (my terms from earlier posts). People have to be free to enter the exchange and choose the public option; the "Gateways" have to be open doors, not walls to keep people out while shielding the private insurers.

Klein is also right that just having something called a "public plan" is insufficient. The public plan has to be strong enough to attract people away from the private insurance system that has failed us. As I’ve written before, the public plan can’t perform this critical function if the market is separated so that most people aren’t allowed to choose the public plan.

Progressive bloggers should be reading Klein and Atrios as consistent, complementary. Klein’s list of other important matters is correct, and Atrios’ point that we need the public plan both for it’s own sake and as a rallying point to generate political support is also true.

The public plan is critical for the long run transition and forcing the private insurers to reform or be replaced. But there are lots of other essential reforms we should make now to prevent deaths and suffering while we’re building a reformed health care system.

Rahm Emanuel, public health enemy?
Adam Green at Open Left, Obama to Rahm, Shut. Up.
Yglesias, what Max Baucus knows about France
HuffPo/Sam Stein, Obama tells Rahm to listen to Hamsher
Jonathan Cohn, how come other countries do this better?

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