Critical Condition

Senators Report Reaching a ‘Compromise’ on the Public Option

Late Tuesday evening it was announced that the group of ten moderate and liberal Democratic senators had reached broad tentative agreement to remove the public option from the Senate health-care bill. But it is important to look at what compromises have been made and what they mean for the health care of all Americans.

The two main compromises are the “Medicare Buy-In” for people between 55 and 64 and the federal government’s Office of Personnel Management (OPM) overseeing a national health-care plan run by non-profit entities where the federal government will negotiate the rates insurance companies can charge. OPM is the agency responsible for the health-care plan for federal employees and members of Congress.

On the expansion of the age of eligibility for Medicare, it is important to remember that the program today is already costing over $400 billion a year and the Congressional Budget Office (CBO) has projected it will be bankrupt in 2017 when it will cost in excess of $700 billion. This year, one in three new people eligible for Medicare is having a difficult time finding a doctor. This is because of the low reimbursement rates paid by the federal government to doctors. As a result, many physicians have decided not to take these patients.

The idea of establishing a type of Federal Employees Health Benefits Plan managed by OPM where individuals, families, and small businesses can buy insurance from non-profit insurance entities in exchanges is giving government more power and control. There is also discussion on mandating that insurance companies spend 90 percent of the premiums they collect on providing health services. This will have a negative effect on their ability to earn a profit. And, if insurance companies do not offer the plans deemed appropriate by the federal agency, then the trigger will kick in for the public option. In other words, the public option is not dead yet.

Before Senate Majority Leader Harry Reid can call for a vote on this revised bill, the CBO will have to complete its cost analysis. The senator needs 60 votes to end debate and proceed with reconciliation of this bill with the one passed by the House on November 7. It is unclear whether he will have them. And, we must remember that President Obama is committed to a health-care plan that would not cost more than $900 billion over ten years and be deficit neutral. I believe that the final cost for the health-care bill will exceed $2 trillion.

In analyzing the “Medicare Buy-In” and the OPM oversight of a national health-care plan proposals, it appears to me that the overall effect will put America on a path to a single-payer, government-run health-care system. These compromises are putting the camel’s nose under the tent and by 2014, the camel will be fully in the tent. We can look forward to “Medicare for All” being a reality with long waiting lists, rationed care, higher taxes, and fewer doctors practicing medicine. This is not a good scenario for our health.

— Sally C. Pipes is president and CEO of the Pacific Research Institute. She is author of The Top Ten Myths of American Health Care: A Citizen’s Guide.

Sally C. Pipes is the president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The False Promise of Single-Payer Health Care (Encounter). Follow her on Twitter @sallypipes.

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