Talking Health Insurance

So a few days ago I watched the Talking Health webcast on health insurance, presented by the Association of Health Care Journlists, The Commonwealth Fund, and the CUNY Graduate School of Journalism.

I listened both as a journalist interested in how to cover this controversial issue, as well as patient with an obvious vested interested in health insurance reform, and the discussion did not disappoint on either count.

For the purpose of this post, I’ve decided to highlight some of the points/questions I think matter most to readers and patients with chronic illness—after all, a key to managing chronic diseases and preventing disease progression is having health insurance that covers medications and appropriate treatment therapies. And, as the NYT’s Reed Abelson, one of the four panelists, pointed out in talking about stakeholders in this debate, patients are the most obvious source but are not well represented.

Do we really know what the difference between public and private insurance is? While some people do, and they usually equate private with better care when they do, many consumers aren’t sure what the public option really entails. According to panelist Cathy Schoen, senior VP at The Commonwealth Fund, context is important here. She says the type of plan usually mentioned in national reform would offer for the first time to people under 65 a plan that is similar to Medicare, one that could compete with private care. The goal of this type of plan is to provide better access and control costs, and consumers would have the choice to keep their existing (private) insurance or choose this new public option. The public option would be standardized across the country and wouldn’t change much over time.

Bruce Bullen, COO of Harvard Pilgrim, a nonprofit managed health care organization in New England, points out some of the pluses and minuses with public vs private insurance: For example, private insurance companies focus on customer service, network building with doctors, and are inherently local/regional, while public ones are more standardized, easily understood, more regulated and perceived to be more equitable.

Other benefits and drawbacks we should consider? The public plan would offer lower premiums, which is attractive to consumers. At the end of the day, we need to control soaring health care costs; advocates of the public plan point to its purchasing power as an advantage, since it would be purchasing for such a large population. Its economies of scale and lack of a need to market itself are also positives. Since healthier competition usually means cost would come down, the public plan could potentially be cheaper. As we know, private sector rates are higher ($12,600 is the avg family premium), but Bullen contends that well-organized plans like HPHC have such mechanisms where they can be quite competitive with public rates.

But is it possible for private plans to compete with public options? At 20-25 percent cheaper than private plans, Bullen says probably not, pointing out that these savings do not mean the public plan would control health care costs. If we’re making the comparison to a Medicare-type system for people under 65, consider that providers often can’t live on what Medicare pays so they move to private insurers for competitive rates. The cost and quality problems that are so widespread now would continue. Also, consider if providers are asked to sign on for less, would they? Or would the government mandate participation?

Whether through a public plan or a private one, Cathy Schoen asserts that we need to be paying for care differently. To do this, we should harness the technology we have but do so with clear outcomes in mind and in the right circumstances. Appropriate technology requires more incentives, which we don’t have right now. In essence, we need to ask: Is it better, and do we have to pay as much for it?

More thoughts on public plans:The term public plan means different things to different people. Some key variations within that term include a federally sponsored new plan to market or a plan that piggybacks with Medicare. It’s the sponsorship that is critical. Medicare uses private claims payers and pools risk, and one of the biggest fears and strengths of the public plan is that it pools risks.

What can government do if doctors refuse to treat people with the public option? Cathy Schoen agrees this is a critical issue, especially since it’s known that Medicare pays far too little for primary care. The public plan would have to come in with competitive rates and if everyone was insured rates between the two wouldn’t be as different because right now we’re already paying for those who don’t have care at all.

Would the public plan become dumping ground for sickest people? Schoen says it is a risk in a reformed insurance market where no one could be turned away or told they are too sick. Things like age variation where a 50-year-old could say “don’t ask me about health status just sign me up” would help combat this, but we still have to worry about risk selection; as soon as you have competing plans, no matter the name of them, this is still a concern. The way to address it is by rewarding plans.

How will public plans affect the innovation US is known for? According to Bullen, it will negatively impact innovation. One of hallmarks of private care is responding to consumer needs and giving answers that work. That’s a big tradeoff—public plans have other strengths, like standardization and equity.

Anyway, these are just some summarized snippets I felt brought up compelling points on both sides. While it’s a huge issue and has everyone talking, there are so many details, variables, and benefits/drawbacks involved in any type of reform that it’s helpful to hear some of them explained in accessible terms. The terms “public option” or “universal health care” spark so many competing emotions and definitions, from some people imagining hybrid plan like we have here in Massachusetts to conjuring up a single-payer system more comparable to Canada or the UK. For what it’s worth, I found the discussion of a public plan similar to Medicare but for younger people a helpful way to frame the inevitable comparisons between private and public insurance plans.

(As an aside, the second segment with the LAT’s Noem Levy and Reed Abelson was great, so if you’re a writer wondering how to find sources for this and what other questions to consider, definitely check it out.)