Journal Hypes Co-Op Failures To Show Public Option Cannot Work, Failing To Mention Co-Op Funding Was Slashed
Blog ››› ››› ALEX MORASH
The Wall Street Journal’s editorial board assailed President Barack Obama's call for a “Medicare-like” public health insurance option as "radicalism" that would "wipe out anything resembling private insurance," when in reality a public option would likely increase competition, lower costs, and expand access to health care for American consumers.
In an article published by The Journal of the American Medical Association (JAMA) on July 11, President Obama wrote about the accomplishments of his signature legislation, the Affordable Care Act (ACA), or “Obamacare,” since it became law in 2010. The article, the first scholarly work ever authored by a sitting president, noted that the uninsured rate has dropped 43 percent (from 16.0 percent in 2010 to 9.1 percent in 2015), that the law has contributed to greater financial security for Americans and that it has actually led to better public health. But the president also noted that there is still work to be done on health care reform, including the need for a “Medicare-like public plan” that could compete with private insurance. On July 9, presumptive Democratic presidential nominee Hillary Clinton publicly reaffirmed her support for the “public option,” a policy she has championed since 1993.
With the Democratic Party coalescing around the public option as the next step for health care reform, the Journal’s editorial board claimed the introduction of a publicly run insurer into the individual health insurance exchanges would lead to a “market exodus” by private insurers and eventually to a “government-run single payer” universal health care system. Hypocritically, the Journal claimed both that the public option would inevitably destroy private insurance and that the failure of several nonprofit health care co-operatives set up by the existing law stood as proof that government-run insurance systems could not work. From the July 12 editorial (emphasis added):
Mr. Obama is re-endorsing what he had hoped in 2010 would be a way station for government-run single payer that would gradually wipe out anything resembling private insurance. Insurers can’t outbid a “free” program that is open to all or most and has the unlimited access to the Treasury that Medicare enjoys. A market exodus would be inevitable.
Democrats claim this would merely be another choice, but they tried a trial-run public option with ObamaCare’s co-ops, which were given up-front federal cash infusions and then were supposed to operate like normal companies. Of the original 24 co-ops, only nine are alive—and most of the survivors are ailing.
Even after jettisoning the public option, ObamaCare passed the Senate with a bare 60-vote majority and the House 219-212, though Democrats commanded their largest majorities since the Great Society. Republicans couldn’t stop anything, but they did oppose the public option for the same reasons as the business community and moderate Democrats: Over time, its radicalism would annex all of U.S. health-care finance.
The Journal’s fearmongering that competition from public option “radicalism” would usurp the private insurance market lacks evidence: Research suggests a public insurance plan would lead to lower premiums and reap enormous benefits for American taxpayers.
According to Kaiser Health News, increasing competition in individual health care marketplaces has shown to lower prices for consumers, and less competition in a state can lead to “substantially higher premiums.” In an op-ed published by The Hill, Richard Kirsch of the Roosevelt Institute noted that a public option can keep costs down without limiting provider options, since the government already pays for care at most of the country’s doctors offices and hospitals for Medicare beneficiaries. Unlike private insurers with limited provider networks, a government-run plan would already have the infrastructure to provide low-cost competition nationwide.
In addition to increasing competition and driving down costs, a public option could dramatically decrease government spending on health care, research suggests. According to an October 2009 policy brief by researchers at the University of California, Berkeley's Center on Health, Economic & Family Security, a public option would be so beneficial for the American health insurance market that it would “most likely both expand coverage and reduce costs to employers, individuals, and the government.” The Economic Policy Institute (EPI) came to the same conclusion in a March 2012 working paper, which included “a public insurance option” among progressive reforms that together could save the government an additional $278 billion over 10 years. Likewise, a November 2013 analysis by the Congressional Budget Office (CBO) predicted that adding a public option to existing Obamacare insurance marketplaces could actually reduce federal spending by $158 billion over 10 years.
The Journal claims the introduction of a public option would lead to universal single-payer health care, but it fails to provide either any proof that the public option would do that or an explanation of why that would be detrimental. The Journal does use the problems faced by government-assisted nonprofit insurers -- called co-ops -- as proof that a public option would not work, but it doesn’t mention that Republicans in Congress cut co-op funding. Meanwhile, though the president has not advocated a national single-payer health plan, economist Gerald Friedman estimated that such a system could save the American economy as much as $592 billion a year, most of which would come from “slashing the administrative waste associated with the private insurance industry.”
In 2009, when Congress was still vetting the public option for inclusion in what would become the ACA, opinion polling often showed large majorities in favor of the provision. Right-wing media outlets assailed the provision for months as part of their coordinated campaign to derail health care reform, but even after several years the abandoned option remains popular.