Among the many bones the Obama administration had to throw to supporters of the health insurance industry in order to get their support for the Affordable Care Act, abandoning the idea of a “public option” on the health insurance exchanges -- a way for consumers to buy in to a Medicare-type program -- was among the biggest.
For-profit insurance companies had no interest in trying to compete with the federal government on the open market, and the opposition to the idea was bipartisan. Even powerful Democrats in Congress promised to block any health care reform bill that expanded the federal government’s role in the health insurance sector beyond Medicare and Medicaid.
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But after the law passed, President Obama appeared to have made peace with the idea that his signature domestic policy accomplishment would not include a public option, it was never clear that he had abandoned the idea entirely. And in an article published Monday in the prestigious Journal of the American Medical Association, the president confirmed that he had not.
The article, (with a byline that, by convention, notes the president’s law degree but only acknowledges his present office in a footnote,) makes the case for establishing a public option in future expansions and improvements of the law that has come to be known as Obamacare.
“[M]ore can and should be done to enhance competition in the Marketplaces,” Obama wrote. “For most Americans in most places, the Marketplaces are working. The ACA supports competition and has encouraged the entry of hospital-based plans, Medicaid managed care plans, and other plans into new areas. As a result, the majority of the country has benefited from competition in the Marketplaces, with 88 percent of enrollees living in counties with at least 3 issuers in 2016, which helps keep costs in these areas low.
However, he noted, that leaves 12 percent of the population -- millions of people -- living in an area served by only one or two insurers. Among the conclusions Obama reaches in his JAMA article is that the idea of a public option -- part of the original Obamacare proposal -- ought to be revived.
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“Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers,” he writes. “The public plan did not make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited. Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.”
While couched in the suggestion that a public option would only be available in areas where the market is not competitive, it’s hard to see how a government-run health insurance program could be limited to specific geographic areas.
If Americans living in some jurisdictions were able to access a federal health insurance program and their neighbors only a few miles away were not -- something that would inevitably happen -- there would be immediate calls for expansion of the program to cover all taxpayers.
And if the point of inserting a government-run program into an underserved community is to spur competition, there’s little reason to assume it would be successful. What insurer would look at a market in which one of its prime competitors would be the federal government and think it was a good idea to jump in?
Obamacare opponents have long argued that the ACA is really just the first step in Obama’s long game -- meant to gradually ease the US into a single-payer healthcare system like the UK’s National Health or Canada’s similar system. And Obama’s JAMA article, in combination with presumptive Democratic presidential nominee Hillary Clinton’s recent stump speeches advocating a public option will only reinforce that suspicion.