From the Institute for Policy Innovation (IPI)
One of the more contentious issues to emerge so far in the health care reform debate is what President Obama has referred to as the public plan."
The president has described it as a Medicare-like health insurance program that anyone could join. It doubtless would be a very comprehensive plan run by the government and largely subsidized by taxpayers just like Medicare. And because Medicare imposes price controls on both hospitals and physicians you can bet the public plan would too.
Proponents will claim the price controls in the public plan will keep costs downthough they would be hard pressed to provide any evidence for the claim. Medicare currently has an $84 trillion unfunded liability according to Medicares trustees. Indeed when Congress created Medicare in 1965 the governments actuaries estimated that Medicare Part A would cost $9 billion by 1990; but it actually cost $66 billion that year.
Exploding costs not lower costs is the rule in Medicare.
And while price controls dont save money Medicares low reimbursement rates are affecting seniors access to care. According to a survey by the American Medical Association 60 percent of doctors say they are limiting the number of new Medicare patients they see.
And then theres fraud: Senator Chuck Grassley (R-Iowa) along with other government officials suggest that Medicare has about $60 billion a year in fraud. Ponzi-schemer Bernard Madoff defrauded people out of some $50 billion and the public and media went (justifiably) berserk. Medicare has $60 billion of fraud each year and the president and the Democratic leadership in Congress want to make it a health insurance model for the country.
The biggest problem with the public plan is that it will be in direct competition with the private sector. Like Medicare Congress will heavily subsidize it and then hide the costs making it financially more attractive compared to the private sector.
The stakeholders in the health care systemproviders insurers drug and medical device companies employers and even some patients groupsrecognize the negative impact of the public plan. Thats why so many are pushing back from it.
Its the closest weve been to creating a Medicare for all" plan and its just around the corner.
