No Public Option Option Is Not an Option

Politico has the story here that House Majority Leader Steny Hoyer has opined that “The Public Option” may have to go in order to get a health care reform bill passed.

Offering this opinion, mind you, a day after Speaker Nancy Pelosi said that a health bill will not be passed without “The Public Option.”

Now opinions are like navels in that we all have them, but in this case there is a correct opinion and an incorrect one. “The Public Option” must never be eliminated from the bill.

Never.

And so why?

The whole idea of going after health care reform at this particular point in our history is to help to get us out of our economic morass: as health care costs keep going up and up health care insurance premiums go likewise. Driving up health care costs. An endless spiral. The whole idea here, is to reduce the cost of health care premiums.

If you put the federal government in a position to sell health insurance to its citizens, health care insurance firms will have to reduce their premiums to compete.

Because the Feds aren’t going to be in it for a profit. As a matter of fact, they will be in it for a loss.

The end game, in my opinion, is Single Payer Universal Health Care and that is why opponents are so shrill. The end game will take down a multi-billion dollar industry.

And it’s about time.

But short of the end game, when we are engaged in simply driving down health care premium rates, it becomes clear why “The Public Option” should be preferred over “Health care co-ops.”

The Co-op Option is not an option.

Simply because it doesn’t get the job done. If the job is to drive down health care premiums having a bill with only health care co-ops won’t reduce premiums.

Don’t believe me? The GAO, at the request of former congressman Thomas Bliley of Virginia, issued this 2000 report on the effectiveness of health care co-ops. The study looked at five separate “Healthmarts” that were created to serve as clearinghouses for small businesses seeking to get health insurance for their employees.

Their conclusion? Scroll down to the bottom of page 6. Here is what it says:

“The experiences to date of small employer purchasing cooperatives typically have not resulted in a third advantage, which is available to large employers: leverage in negotiating lower premiums. Officials of the purchasing cooperatives and participating insurers as well as several recent studies reported that cooperatives typically offer plans at market prices for plans with similar benefits offered to small employers outside the cooperative. This similarity in premiums is also reflected by rate quotations we obtained from several insurers. The cooperatives’ potential to reduce overall premiums is limited because (1) they lack sufficient leverage as a result of their limited market share; (2) the cooperatives have not been able to produce administrative cost savings for insurers; or (3) their state laws and regulations already restrict to differing degrees the amount insurerscan vary the premiums charged different groups purchasing the same health plan.”

So the question is, why pass a bill that doesn’t do what it was intended to do, and that is drive down health insurance premiums.

The GAO report revealed that co-ops won’t work.

Yes they enable small businesses to get health insurance for their employees, but at no cost savings at all. Not on the scale of what big businesses can negotiate for their employees.

No, the “No Public Option” option is not an option.

Without “The Public Option,” this bill, and any one like it, should be killed.

Maybe President Melia Obama will have better luck.