The President did, quite specifically, say that the public option will be forced to make a go of it out of premiums, not the Federal Treasury. No ambiguity about it. It will be just like the USPS, Freddie Mac and Fannie Mae… well, maybe those aren’t the best examples, but I get what he means.
He also said that the public option will realize its savings from being a not-for-profit entity (that should lower costs by about six percent) and by not paying the executives who run it — I don’t think that’s quite what he meant to say but, again, I get it. And, since the program will only be available to those who seek it, there will be no sales, marketing or advertising expenses.
No word on administrative costs or taxes, but it looks like the public option will enjoy about a 10% cost advantage over the for-profit insurers who will, no doubt, flock to the exchanges to scoop up the otherwise uninsurables for whom that will be the primary market. What could go wrong?
I have mixed feelings about his assurance that we will no longer be paying the health care costs of the 12 million or so illegal aliens living and working in this country. On the one hand, I don’t think that people who entered this country illegally should be given anything, let alone free health insurance, on the other hand, come on, we don’t want them coughing and bleeding all over everything while they’re here. Anyway, I just don’t believe him when he says that they will not be covered in some way (<cough>taxes<cough>). I’m not calling him a liar, you understand, just sayin’.
President Obama says that “the Public Option” will be just one of a “basket” of options available to Americans who, if they like their private insurance coverage, will be able to keep it. “The Public Option” will just be there, you know, sittin’ there and stuff in case there’s anything you don’t like about your private insurance like if it costs too much or requires co-pays or whatever.
There’s absolutely no truth at all to the suggestions that “the Public Option” is a “trojan horse” designed to sneak single-payer national health into the system or that it is in any way intended to undermine the private insurance market. It will just be another competitor on the same level playing field as everyone else is all. Nothing to see here. Move along.
OK, just a few points I want to clear up and then I’ll sit quietly (for awhile, anyway) and let the grown-ups work out all this which is obviously way to complicated for my limited capabilities.
Will “the Public Option” have to pay its way from premiums collected or will it be able to dip into the Federal Treasury if it is unable to pay claims out of its loss reserves and current cash flow?
Will “the Public Option” have to pay its own administrative expenses or, like the Social Security Administration (which runs the Medicare program), will it be able to coerce health care providers through force of law to cover its administrative expenses out of the remimbursements they receive from it?
Will “the Public Option” be liable for the same local, state and federal taxes as private insurers or, like Medicare, will it be exempt from all taxation?
Now we know that “the Public Option” will be under no pressure to make a profit — in fact profits will not be part of “the Public Option” at all, so there should be a cost savings of about six percent (the percentage of Earnings Before Interest, Taxes and Amortization enjoyed by the private health insurance industry); but I guess I’m also asking if there will be any pressure to break even? Or will “the Public Option” just go to the taxpayers whenever it needs a cash infusion?
Because, you see, here’s the thing: If “the Public Option” doesn’t have to pay taxes and doesn’t have to pay its own administrative costs, and doesn’t even have to break even because it can make up the difference out of public funds; How can any private insurance plan EVER compete against it? I mean, it just doesn’t add up — literally.
So what exactly is “the Public Option” and what exactly is the purpose of offering a “competing” plan that doesn’t have to, uh, compete?
OK. I’ll keep quiet now while my betters do the heavy thinking.