Liberals Call Govt. Health Option Non-Negotiable

Dec 17, 2008 4:16pm

ABC News’ Teddy Davis Reports: Advocates of a government alternative to private health insurance fired the first shot of the new battle to reform the nation’s health-care system on Wednesday, saying that efforts to water down this key component of Barack Obama’s health-care plan should be rejected by members of Congress.

“In the absence of a public plan you would have to so strictly regulate [private] health plans that they would all have to become public plans,” said Rep. Pete Stark, D-Calif., chairman of the House Ways and Means Health sub-committee.

Stark spoke out on Wednesday because he is concerned that any effort to reform the private health-insurance market will prove ineffective if Americans are not offered the kind of Medicare-style government option contained in Obama’s 2008 campaign proposal.

Stark’s concerns were echoed by Health Care Now, a liberal advocacy group.

“We agree with Congressman Stark that a health care solution that does not include a public plan would be a non-starter,” said Richard Kirsch, the national campaign manager for Health Care for America Now. “President-elect Obama ran on the promise of giving consumers a choice of keeping the private insurance they have or opting in to a newly-created public insurance plan, and it is the second part of this hybrid reform that ensures we are no longer at the mercy of the private insurance industry which keeps charging us more, giving us less, and lining its own pockets with profits.”

The California congressman made his remarks on a conference call with reporters sponsored by the liberal Campaign for America’s Future. A spokesman for the progressive advocacy group told ABC News that it was targeting the insurance industry because a spokesman for the industry’s trade association recently criticized the public health option contained in Obama’s health-care plan.

“[A] public option … would not achieve the type of goals on improving coverage and improving access, and making healthcare coverage more affordable,” Robert Zirkelbach, the spokesman for the insurance industry’s trade group, told the American Prospect magazine on Nov. 20.

Asked to explain the insurance industry’s policy rationale for opposing a public health insurance option, Zirkelbach pointed to a recent study on cost-shifting by Milliman showing that public health programs underpay health-care providers who then over-charge patients with private health insurance.

Stark dismissed the insurance industry’s claim that health-care providers are underpaid by government health-care programs like Medicare.

“Most private plans are poorly managed,” said Stark. “They’re the General Motors of medical care. Medicare is paying the right amount.”

While saying that he hopes to assemble a coalition which includes doctors, hospitals and the pharmaceutical industry, Stark indicated that he is less concerned about winning the support of insurers.

"They’re the easiest to roll because no one likes insurance companies,” said Stark. “I guess someone has to be the bad guys.”

Joining Stark on Wednesday’s call was Prof. Jacob Hacker who directs the Center on Health, Economic, and Family Security at U.C. Berkeley’s School of Law. Hacker discussed a study he recently conducted which concluded that a public health option would ensure universal access to health coverage while exerting downward pressure on prices in the private health insurance market.

Hacker, author of “The Great Risk Shift,” has been at the forefront of designing and promoting a hybrid health-care system which builds on the existing system of employer-provide insurance while creating a Medicare-style government alternative. During the 2008 Democratic primaries, variations of Hacker’s hybrid approach were proposed not only by eventual nominee Obama but also by top rivals Hillary Clinton and John Edwards.

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