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A Public Option in Minnesota?
Many progressives felt the 2009 health reforms, while significant, didn’t go far enough in reshaping the market to control costs and reward quality over volume.
In particular, the “public option”—a government-run health insurer designed to compete on the open market with private insurers—became a symbolic line in the sand.
A public option differs from public plans such as Medicaid, MinnesotaCare, and Medical Assistance because these programs represent subsidized insurance plans targeted to the uninsured rather than a government-run insurance option widely available for purchase on the open market.
When the final reform package did not include a public option, many progressives worried it did not do enough to change the status quo.
However, many overlooked that while the Affordable Care Act (ACA) includes no federal public option, it does pave the way for the implementation of state-level plans.
During the original reform debate, progressive groups argued a government-run insurer would serve to keep for-profit health insurers honest. According to the Center for American Progress, “More than half of the market is controlled by two carriers in at least 39 states,” potentially leading to unchecked profits, inefficient companies, and a lack of plans tailored to different types of consumers. (Two insurers control 76% of Minnesota’s market.) By eliminating the profit motive and adding another competitor to the market, progressives believed a public option could drive down costs.
Yet calls for a public option were shouted down by conservatives voicing two contradictory complaints: First, inserting the government into the market would give it an unfair advantage and undermine private companies, and second, the government can’t do anything right and so should stay out of the health insurance business. Despite the ability to prevent its inclusion in the final bill, this faulty logic didn’t fool many Americans, as polls at the time showed 60 percent of Americans and 62 percent of Minnesotans favored a public option.
With such popularity, why has the federal public option’s little brother, the state-level public option, been so overlooked by both states and voters? Jim Hart, a retired doctor and professor at the University of Minnesota’s School of Public Health, provides one answer. “People were assuming there’d be some public option [in the 2009 reforms] and the question was how big it would be,” he explains. When no robust public option emerged, disappointed progressives overlooked the state-level idea.
Hart says there are two sections of the ACA that encourage a state public option. First, Section 1331 provides a route to federal dollars for states to offer a health plan themselves to residents who would receive insurance subsidies (those at 134-200% of the poverty line; those below this amount will be Medicaid recipients). Second, Section 1332 “basically allows a state to design an innovative system,” Hart says. That system could include a state public insurance plan.
Currently, California is pursuing the first path to a public option, while Vermont has undertaken reforms following the second.
Could Minnesota follow a similar path?
Hart believes the answer is yes, and says it “would add efficiency” if the state had an insurance plan that could negotiate directly with care providers. Such a plan could compete favorably against private plans on an insurance exchange.
As Minnesota looks to future health reforms in our state, a state-run health insurance option deserves our consideration.
Posted in Health Care | Related Topics: Health Insurance Health Care Reform
11 Comments
September 28, 2011 at 9:39 pm
My turn Danny, where is your proof. I will gladly take MPR’s figures over yours any day. So long as party leaders continue doing what your doing, (minimizing the truth), there never will be any urgency to fix this fraud. As I have said before counting the fraud here is like counting abortions before roe-v-Wade, pure speculation. What you are not honestly saying is that closing the fraud loopholes would slow down and scrutinize the payout process, something your spin artists have long stood against. It starts looking more like the Buereau of Indian Affairs a century ago, starving the needy with rotten meet.
September 28, 2011 at 5:26 pm
If fraud were that high, the repubs would have latched onto it by now and heralded it to the world. It has no validity without some verifiable facts.
September 28, 2011 at 3:18 pm
Medicare fraud isn’t as high as fraud with private insurers because private insurers don’t really even look for fraud. They just tack the additional cost onto your premiums. Come on, WD, get your facts straight.
September 28, 2011 at 3:14 pm
WD Billy—you know enough to be dangerous. Medicare fraud isn’t distantly close to 30% fraud. You are again using the Michelle Bachmann school of facts. Right now, you are acting like the fraud.
September 15, 2011 at 11:23 am
Bernice, again you portray medicare as only having a 1-2% overhead when compaired to money paid out. The problem is that upwards of 30% of that payout is fraud. By not counting fraud you make it sound like a panecea that it is not. Medicare is not “patient based” healthcare any more than it’s close cousin veterans healthcare. They are both top down “System based” one size fits all socialist bueracracy’s with horribly bad records. I am tired of buying scooter store scooters for the lazy, and overmedicating patients for the systems profit, all of which seem to be fine with you so long as only the poor are so abused.
September 15, 2011 at 10:02 am
Bill: Medicare accepts everyone over the age of 65 without asking about pre-existing conditions or possible future health problems. For-profit insurers routinely refuse to provide coverage to those they believe might get sick AND deny payment of claims they think could conceivably be traced back to a pre-existing condition. These practices increase their profits mightily.
Administrative costs for Medicare are about 1-2% of dollars disbursed, including the time providers spend submitting claims. Those for private insurers are 20-25%. Medicare is far, far cheaper and is inclusive. No one over 65 is turned away.
The Affordable Care Act should have included the option for anyone over 55 (or, better, anyone at all) to purchase Medicare, but didn’t. That option would have helped low-income workers and the unemployed who have no money with which to pay high premiums.
September 15, 2011 at 9:16 am
You cerebral types never end with your attempts to give those of us on the poor end of the stick second class health care. The very concept that a bueracratic government run option would be cheaper than Insurance companies leaves out the only way that could possibly happen, by reducing treatment options for those of us on the recieving end of that stick. In return you get more overpaid public employee jobs. Let me help you out a bit here folks, we want a “Patient Based” not self serving “system based” healthcare. Only a hybrid coop structure with local control and decition making can accomplish that. We do not need or want your built in political advantages or their hidden costs, we want every penny going to cover healthcare costs, not your padded pension.
September 15, 2011 at 8:53 am
We shouldn’t give up consideration at the federal level either. Those working on plans to keep Medicare solvent need to be reminded that coverage could be offered to at least some of those who don’t currently qualify for it at policy rates adjusted to help sustain the program for those that do. This nearly made it into ACA before Joe Lieberman, who had previously supported it, shot it down.
September 14, 2011 at 11:48 am
It does. But we won’t see any likelihood of its consideration until we sweep out the conservative naysayers who think somehow that we need to protect private insurance companies.
Dan Conner says:
September 29, 2011 at 8:28 am
WD Billy - Are you losing it? First, I never said anything about closing “fraud loopholes” slowing down a payout process. I believe in strengthening the process to squeeze out whatever fraud is present. Second, I have some knowledge of Medicare. There is nothing published that I have seen indicating anything close to 30% fraud. I think its just more of your Michelle Bachmann school of statistics, where if it sounds good when you make it up, use it. I also noticed you still have not linked or referenced anything proving your contention. That’s because there is NOT 30% fraud.
You have fabricated what I wrote and fabricated information you have written. Instead of just pulling numbers out of the air, you need to reference what you say to substantiate your wild and irresponsible claims. You are not credible and your information is not to be trusted, unless it can be verified.