'Public Option' or Co-Op? Experts Sound Off


Murmurs from the White House that the government-sponsored public insurance option could be negotiated or even dropped from President Obama's health care reform plan in favor of nonprofit cooperatives has left the medical community abuzz and the public a bit confused.

The talk started Saturday after Obama indicated during a town hall meeting in Colorado that publically funded health insurance was not the centerpiece of his reform plan but "only a sliver" of the solution. And on Sunday, Health and Human Services Secretary Kathleen Sebelius said that co-ops are being considered as an alternative way to fulfill the president's goal of creating more competition in the health insurance industry.

Many policy experts, however, don't see co-ops as a simple substitute for the public option.

"Starting up new co-ops across the country that would effectively compete with the mammoth insurers," said Timothy Jost, a health law expert and professor at the Washington and Lee University School of Law, "is like expecting people to start up electric companies in their garages to compete with the dominant regional power company."

"The public plan is not vital to covering the uninsured," Jost added, but he said using government money to subsidize the uninsured coverage through private insurers "would be like the federal government abandoning the post office and rather paying subsidies for everyone to use Fed Ex. Without any competition, anyone to keep them honest, insurance premiums will go through the roof, and with them the federal deficit."

While politicians are digesting the apparent new turn in the health care debate, doctors and public health experts have gone to great lengths to define the difference between a public option and a co-op and what it means for patients.

What is a 'Public Option'?

The "public option" is a proposal to create a new government insurance program similar to other government insurance programs such as Medicare, Medicaid or the Veterans health care system.

But instead of offering the insurance to a select group -- such as the elderly in Medicare, or poor families as in Medicaid -- the idea would be to offer the government insurance program to a wide swath of the public.

Critics of the public option say it would lead to government rationing of health care, a government takeover of health care that would compete unfairly with the private insurance market.

Losing the Public Option: What It Means

Health professionals' opinions about the massive health care reform proposal have varied widely across the country, especially on whether the bill would result in the government insurance plan negotiating lower pay for doctors.

"Without a public option, there will be no effective cost-control mechanism in the health care reform package," said Dr. Daniel Blumenthal, associate dean for Community Health at the Morehouse School of Medicine in Atlanta.

"Recall that we already pay over twice as much per capita for health care as people in any other developed country. Without cost control, health care reform will implode in a few years," added Blumenthal.

Paul Duncan, professor in the department of Health Services Research, Management and Policy at the University of Florida in Gainesville, agreed that the public option was a way to drive down costs, especially health insurance costs.

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