Jonathan Alter: One Nation Under Medicare- Obama must make insurers compete

[babylonsister]

Jonathan Alter
One Nation Under Medicare

Obama must make insurers compete.
Published Jun 20, 2009
From the magazine issue dated Jun 29, 2009


"That was pretty impressive, wasn't it?" President Obama said with a smile after he slapped a fly that was buzzing around him during an interview last week. "I got it. I got the sucker."

If only slapping around the players in the health-care reform debate were so easy. The annoying creatures he has to contend with this summer are the bickering stakeholders in a $2.1 trillion market that makes up 16 percent of the economy.

Obama's got good odds of getting some kind of bill this year. But will the country see real reform that both expands coverage and cuts long-term costs? Or will the legislation include lots of necessary but insufficient changes that leave it well short of transformational? That depends on whether Obama gets approval for a "public option"—a choice that would allow people to keep their insurance or buy into the same kind of plan offered to members of Congress. The latter is—let's face it—Medicare with a different way to pay for it.

But why would we want more Medicare? Isn't Medicare a mess? Well, yes and no. The fabulously popular free health-insurance program for the elderly is running out of money, thanks to exploding costs. But the administration of Medicare is a miracle of low overhead and a model, despite all the fraud and abuse, of what government can do right. Three percent of Medicare's premiums go for administrative costs. By contrast, 10 to 20 percent of private-insurance premiums go for administrative costs. Roll that figure around on your tongue. When you swallow and digest it, you'll understand that any hope of significantly reducing health-care costs depends on a public option.

Reducing those costs has always been Obama's focus. Unfortunately, the upfront cost of, well, cutting those costs just went from $1 trillion to $1.6 trillion last week when the nonpartisan Congressional Budget Office priced the version of the bill that the Senate Finance Committee put forward. It's not going to go on the credit card—that's settled. So where's the money going to come from?

Partly from taxes. Unions and some rich people won't like it, but we're coming to the end of the era when cosmetic enhancements are not only covered by insurance but the premiums are fully tax-deductible. Why should the taxpayers subsidize 40 percent of the cost of a designer smile?

more...

http://www.newsweek.com/id/202872

[SemiCharmedQuark]

1. I love Jonathan Alter. He and Eugene Robinson rock my world.