Public Option

There is also the NYT/CBS poll.

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Brian,

Private companies are raising rates every year, denying people coverage, dropping them after they’re sick, and raising CEO compensation all the while.

If that looks like a better system to you, then I’ll assume you’re married to a doctor who provides your care for free.

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Gordon:

Private companies doing the activities that you mentioned is absolutely maddening and I don’t believe that it is a good system at all. However, I believe the better answer is to make the marketplace friendlier to competition. Then if a company would then deem a specific person “too risky” to insure, this would create a market for a savvy entrepreneur who knew how to accurately quantify this extra risk.

Doug:

Concerning waste compared w/private insurers:

From the WSJThird, private insurers must combat fraud — or go out of business. Indeed, these payers have every incentive to invest in antifraud personnel and strategies down to the point where return and investment are equal. But anyone who thinks that a public plan could serve as a “yardstick” for the private sector needs to consider Medicare’s dismal record with regard to fraud, waste and other abuse.

In fact, the total amount of Medicare fraud is unknown. The government does not measure or estimate fraud in its programs; instead, it measures payments made “in error.” According to Medicare’s own most recent data, payments made in error amount to over $10 billion annually. (Medicaid’s payment errors in 2007 equaled a whopping $32.7 billion, according to a report by the Department of Health and Human Services.) Others have claimed Medicare’s payments made in error are much higher. Even with the inclusion of the budget of the inspector general for the Department of Health and Human Services, Medicare spends less than one-fifth of 1% on antifraud measures — a small fraction of what private plans invest in their efforts to build a network of honest providers.

Worse, in four of the past five years Congress has turned back Medicare’s pleas for $579 million of additional antifraud funding, on the grounds that these dollars subtract from the budget funds for curing cancer and anti-obesity campaigns. Based on experience, Congress will always underinvest in fraud. Yet according to a House of Representatives Budget Committee hearing in July 2007, return on investment for certain Medicare antifraud measures were estimated to be in excess of 13-1. Will a public plan also hemorrhage from fraud because of chronic Congressional underinvestment?

As far as the second part of your argument. I understand you do have a source for your small amount of administrative costs, however are administrative costs waste? Also consider the following (this source is the same as my first comment):

Top Ten Myths of American Health Care – A citizen’s Guide
Critics of the U.S. system often argue that Medicare and other government programs have lower administrative costs than private health insurance. According to the most recent Medicare Trustees Report, administrative costs for Medicare are only 1.5 percent of total expenditures.4 For private health care, that number is said to be as high as 25 percent.

Walk into any hospital or doctor’s office and you will see why these estimates are misleading and inaccurate. According to a recent study by the Council for Affordable Health Insurance,
the administrative costs of Medicare actually total around 5.2 percent. Meanwhile, the administrative costs of private-sector health care total about 8.9 percent. A similar study by PricewaterhouseCoopers found that only 6 percent of private health care premiums go to administrative costs and a full 86 percent of premiums go to providing actual medical care. The reason that official estimates were so far off was that they didn’t account for Medicare’s hidden costs.

For instance, the Medicare Trustees report doesn’t include things like the salaries of managers and administrators or the marketing costs associated with advertising new policies like the Medicare
Part D drug benefit. Private health care providers, on the other hand, include all of these expenses in their estimates of administrative costs.

On top of that, Medicare passes off a great deal of its costs to private payers. A recent study showed that, in Washington State alone, $738 million in charges were shifted to private payers to make up for underpayments by Medicare and Medicaid in 2004. That same year in California, private payers and hospitals paid an extra $45 billion to compensate for unpaid Medicare costs.

Indeed, even though proponents of government health care insist that the uninsured represent a “hidden tax”—that is, those with health insurance pay a hidden tax to subsidize the care of those
without health insurance—the reality is that the “uninsured” add only about 1 percent in hidden costs to the price of the insured’s insurance plan. A far greater hidden tax is caused by government
Medicare and Medicaid programs’ low reimbursement rates which add as much as 10 percent in hidden costs, or subsidies, to those paying for private health insurance.

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That’s a neat graph. Do you think maybe the gap might be from people like me who have had CAT scans denied even though my oncologist called the insurance company himself to tell them it was needed? Do you think that maybe the gap might also include money not spent on blood tests every months because the insurance company deemed that after chemo I only needed them once every 12 months? Why don’t you take a look at the amount of profit increase vs claim denial increase? Or maybe my doctor just had my testicle removed for testicular cancer because he was trying to defraud my insurance company.

I recommend you watch this video. This guy was a top dog at Cigna. For moral reasons he resigned.

http://www.facebook.com/ext/share.php?sid=98697514341&h=Wg7NS&u=DPuoO&ref=mf

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