Conservatives — July 23, 2009 at 5:55 am

Conservatives: Public Health Care Option Will Abandon 100 Million Citizens


The conservative news outlet, Newsmax, has a “report” out today with the following headline:

Experts: Obama’s ‘Public Option’ Insurance Will Abandon 100 Million Citizens

Up to 100 million people would lose their current healthcare plan within the next three years if Congress passes the “public option” health bill now making its way through Congress, policy experts tell Newsmax.

Defections on that scale would mean the death of the health-insurance sector within five years, a leading GOP congressman says.


First, it’s important to note what Newsmax Media is. From teh WikiGods:

Christopher W. Ruddy started on September 16, 1998, supported by a group of conservative investors, including the family of the late Central Intelligence Agency Director William J. Casey. Later Richard Mellon Scaife, his former employer at the Pittsburgh Tribune-Review and a supporter of conservative causes, invested in the fledging company.[2] One of the initial board members was author James Dale Davidson who edited a financial newsletter that had shared Ruddy’s interest in the Vincent Foster case. Davidson’s co-editor, Lord Rees-Mogg, former editor of the The Times and Vice Chair of the BBC, later became chairman of Newsmax Media.

So, who are the “policy experts” that are making this dire prediction? They are from The Lewin Group, a self-described consultant group that provides “objective analyses and strategic counsel to prominent public agencies, nonprofit organizations, industry associations, and private companies across the United States for more than 35 years.” DigAC a little deeper and you find they are:

…part of Ingenix, which is owned by United Healthcare Group, the insurance behemoth that has been buying up insurance companies left and right, expanding its reach into just about every segment of the health-insurance market. Its flagship, UnitedHealthcare, helps make it the largest health insurer in the country.

Ah. That explains things. (More on the Lewin Group and their report at Media Matters.)

And who is the GOP congressman who they cite? Rep. Tom Price (R-Georgia):

Price helped lead the charge against the Clintons’ health-care plan in the early 1990s as a member of the Georgia Medical Association. Since his election to Congress, he has opposed federal intervention in negotiating the cost of Medicare drugs.


Ah. That explains even more. (More on Price’s lock-step parroting of the Luntz plan to kill health care reform at Media Matters.)

These are the groups and individuals claiming health care reform with a public option will throw over a 100 million Americans out of their current private health insurance programs.

Lewin concludes that 103.4 million Americans would sign up for the public plan, cutting the size of the private-insurance market just about in half. In three years, 48.4 percent fewer people would be covered by private insurance.

…Price charges…“This will destroy the individual private insurance market in this nation. And if you talk to the folks who authored the plan, they admit it. They aren’t trying to hide that at all. It’s just the President who’s trying to hide that.”

The big Boogeyman being trotted out by Price and, as I have come to realize, many other groups is something they refer to as COST-SHIFTING.

One reason that healthcare policy experts cite for the profound impact the public-option would have on private insurers is “cost-shifting“.

Hospitals and physicians now defray the cost of the billions of dollars of free medical care they provide to uninsured people — known as “uncompensated care” — by increasing their fees to private health plans. As the number of people covered by private plans diminishes, fewer policyholders remain to absorb the cost of uncompensated care, which raises their premiums and results in an ever-narrowing base of privately insured.

“It’s a death spiral,” Price tells Newsmax, “because as you take people out of personal insurance market then you are decreasing the number of individuals for whom risk is spread across. As you do so, the cost increases for each individual that remains in the private market. With the bill, you get to that point relatively quickly.”

Others are jumping on the “cost-shifting will ruin EVERYTHING!!!” band wagon.

The U.S. Chamber of Commerce is one of them. In letter to the members of the House of Representatives, they wrote:

Another troubling provision is the creation of a new government-run insurance plan. Employers currently suffer a significant cost-shift from existing public programs, and the program described in House legislation would significantly increase costs for every American who purchases private insurance. We are also concerned that the government plan will not be a fair competitor, and employers will not be able to continue offering their current plans, which cover more than 170 million Americans.

Ah, yes. “Not a fair competitor”. And that’s because, of course, when you aren’t trying to make a profit, you can keep costs low. The letter was signed by 31 different organizations, many of which are either lobbying arms for the health care insurance industry or have direct ties to it. It’s no wonder that they are so afraid of a non-profit program entering the marketplace. They are terrified that it will do exactly what President Obama and proponents of the public option say it will do: keep private insurance companies honest. Once that happens, they will either face a dramatic decrease in profits or see an exodus of customers walking away from their products.

Surprisingly, the Society for Human Resource Management is on the bandwagon, as well. In a letter [.pdf] to Senators Edward Kennedy and Michael Enzi, they wrote this regarding the public option:

Provisions to include a new government health plan with the federal government administering the plan and determining benefits would mean additional cost-shifting to private plans, a further threat to the employer-based system. Inadequate public plan reimbursement under current law has resulted in significant cost-shifting to private plans, increasing costs for both employers and employees. SHRM strongly recommends that the Committee first allow private insurance market reforms to be implemented to determine if this approach will provide access to the uninsured and lower overall health care costs as opposed to creating a new government health care plan.

It was surprising to me that the SHRM would take this stance. I would have predicted they would come out FOR a public option because it would give their member organizations an additional option to high-cost private insurance plans.

But what of this evil “cost-shifting”? Does it represent the death knell for private insurance? I would argue that this is hardly the case, at least no more so than is already happening. By their own admission, the cost-shifting to private insurance companies of providing emergency health-care to uninsured Americans is already happening. Hospitals and other caregivers already are forced to increase their prices to help defray these costs and those increased prices are, of course, passed on to the groups and individuals who pay for their insurance products. Under the health care reform plan in Congress, significantly more people would be covered so that would reduce the number of uninsured people getting treatment but not paying for it. Equally important, these people would seek help before needing to go to the emergency room (with its dramatically higher costs), a much less expensive proposition. Clearly these two factors would offset any lower payouts to hospitals and doctors such as those predicted by the opponents of a public option.

But all of this lowers profits and that simply can not be allowed to happen if the health care insurance industry has anything to say about it. They are, as is well-documented here at the Daily Kos and elsewhere, spending enormous sums of money to prevent this from happening. Their public relations arm is busy with ads such as the one recently put out by the Campaign for an American Solution, the public relations arm of the American Health Insurance Plans (AHIP) organization. Narrated by a sugary-sweet voice, the ad says:

Illness doesn’t care where ya live or if you’re already sick or if ya lose your job. Your health insurance shouldn’t either. So, let’s fix health care. If everyone’s covered, we can make health care as affordable as possible and the words “pre-existing condition” become a thing of the past. We’re America’s health insurance companies supporting bipartisan reforms that Congress can build on.

As the bagof health and politics spelled out in their diary yesterday, the ad is a smokescreen to cover the unstated goal of making sure that health care insurance companies continue to reap huge profits at the expensive of the sick. Let’s not forget, if “everyone’s covered” through their plan, that means tens of millions of new customers for them and that, boyz and girlz, means bonuses for the upper management of these companies and mo’ money, mo’ money, mo’ money for their stock holders. Ayup.

I’m just sayin’…