The Chairman of America's Health Insurance Plans Supports A Public Insurance Option

[babylonsister]

http://www.prospect.org/csnc/blogs/ezraklein_archive?month=03&year=2009&base_name=the_chairman_of_americas_healt

THE CHAIRMAN OF AMERICA'S HEALTH INSURANCE PLANS SUPPORTS A PUBLIC INSURANCE OPTION.


Never thought I'd get to write that headline. But it's true. The current Chairman of America's Health Insurance Plans is George Halvorson, CEO of Kaiser Permanente. Halvorson also serves on the Commonwealth Fund's Commission on a High Performance Health System, which just released a plan called "The 2020 Vision." You can download the plan here. I did. And I can give it a recommendation I can rarely offer to health reform proposals: The contents surprise.

Page VI: "All members support and endorse the recommendations presented in this report."

Page XII: "Establish a health insurance exchange that offers an enhanced choice of private plans and a new public plan. This new public plan would offer comprehensive benefits with incentives for disease prevention and payment methods that reward results. It would build on Medicare’s claims administrative structure and national provider networks. The exchange and new public plan would be open to all, including large employers."

Importantly, what Halvorson has endorsed is not merely a public plan, but a public plan that can use Medicare payment rates -- which is to say, Medicare bargaining power -- to lower prices. And they've even modeled the premiums, estimating that the public plan would be 20%-30% cheaper than comparable private insurance:



Halvorson is a notably forward-thinking insurance executive. Kaiser Permanente is an integrated system that provides some of the best care at the best prices. His book Health Care Reform Now!: A Prescription for Change is a thoughtful contribution to the genre. And he doesn't fear the public plan. But nor does he deny its advantages. Compared to traditional fee-for-service plans, the public option is simply a better deal for consumers.

Indeed, the report makes clear that this is an argument for, rather than against, the inclusion of a public plan. "By establishing a new public plan available nationwide, the framework would also provide the basis for a new competitive dynamic in insurance markets and provide a strong foundation for payment and system reforms." Halvorson believes Kaiser Permanente can compete in that environment. Their integrated care systems and corporate agility will allow them to offer higher quality at a lower price. He may well be right. The fear that many of his fellow CEOs evince, however, comes because they hold the opposite view of their chances in competition against a public insurer. Unable to ensure higher quality or lower prices, they will lose market share. They may also be right. But the consumer benefits much more from the virtuous competition outlined in Halvorson's vision than from the anti-competitive policies of his colleagues.

[Mojorabbit]

1. That is a pretty high premium for

low income workers.