The Best Way to Save Obamacare

In order to establish a working market, it is critical that a base be established.  This base must resolve the majority of day to day needs in a cost effective manner.  No more and no less.  Thus a brain surgeon will still avoid day to day traffic, but if needed he can still execute at the base rate.  

That be will be negotiated and it is best administered in small regional chunks allowing local competition to be maximized.

Improved services can be split off and used as an enhanced offering and sold privately.  Here it would be well to explore methods used in other countries who have all years of experience both good and unsatisfactory.

The real point in all this is that the majority of medical need is relatively minor or diagnostic.  That level needs to be properly served as part of a universal program.  After that a program needs to be in place to resolve more serious conditions in a cost effective manner..  It has been evolving..

The Best Way to Save Obamacare

By JACOB S. HACKEROCT. 27, 2016

http://www.nytimes.com/2016/10/28/opinion/the-best-way-to-save-obamacare.html? 

The Affordable Care Act has faced a rocky six months. First, major national insurers scaled back their participation, leaving about one in five people buying coverage through health exchanges with only one plan to choose from. Then this week, the Obama administration announced that exchange plans would post an average premium increase of more than 20 percent (though most enrollees would be insulated from the full increase by subsidies for their coverage).

As someone involved in the debate over the Affordable Care Act from the start, I don’t find these unhappy events all that surprising. From the outset, I’ve argued that without a public option — a Medicare-like plan that would be available to all Americans buying health insurance — insurance competition would dwindle and premiums would skyrocket. Now that they have, it’s time to do now what we should have done then: take the simplest route to a more stable and affordable health care system.

Critics of the public option are convinced it’s a one-way ticket to single payer (the government alone provides coverage). History suggests the opposite: The public option isn’t a threat to a system of broad coverage through competing private plans. Instead, it’s absolutely critical to making such a system work.

We’re already heading toward single payer in sections of the nation — only it’s a private plan doing the paying. Next year, five states will have only one insurer in their exchanges, the online marketplaces set up to allow uninsured Americans to buy subsidized coverage. Nine more states will have just two insurers.

The diminishing number of choices doesn’t just hurt consumers; it also makes it harder for regulators to use antitrust tools to push back against this consolidation. Who wants to be the official accused of causing an insurer to leave the exchanges? It’s a perverse equation: As the number of insurers goes down, the leverage they have over regulators goes up.

These problems are what motivated proposals for a public option in the first place. Major parts of the country lacked enough insurer competition to keep costs in line, especially with rapidly consolidating providers. And the proposed alternatives to a public option, like the insurance “co-ops” eventually included in the 2010 law, did not have the bargaining power and reach that a Medicare-like plan would have (and most of them have since gone out of business).

The argument by public-option supporters wasn’t that it would or should replace private insurance. It was that having a public plan as a benchmark and backup was essential to make competition among private plans work. The models we have of successful competing health plans have a public or quasi-public option. That’s true in Medicare, where private plans operate alongside the traditional program. And it’s true in the federal employees’ health system, where a majority of enrollees choose Blue Cross-style nonprofit plans that are overseen by the government to ensure they remain viable.

Having a public plan alongside private plans won’t merely ensure that everyone has a choice. It will also pull more people into the system, creating a broader pool for all the plans. In polls conducted in 2009 and 2010, substantial majorities of Americans said they would feel better about being required to have coverage if they had the choice of a public plan.

A public plan is attractive in part because it can offer a broader network of providers. As exchange plans increasingly move toward very narrow networks, this would be another enormous draw — especially for more affluent consumers who have so far shunned the exchanges.

The public plan can also improve the overall system. Medicare has pioneered innovations in reimbursement, and it has improved hospital quality by imposing new penalties for readmissions. A public option could build on these breakthroughs and extend them to Americans under Medicare age.

The biggest advantage of the public plan, however, is its greater ability to restrain prices. As rapidly as the insurance market is concentrating, medical providers are consolidating faster, driving up prices and creating huge differentials even within regions. Medicare hospital reimbursements vary much less — and they’re typically much lower. As a result, Medicare has experienced slower per-person cost growth than private plans, particularly in recent years.

On the other hand, private plans are much better poised to develop integrated systems that closely monitor outcomes for a smaller circle of providers. Just as in Medicare, public and private plans can complement each other as they compete.

The public option is an ambitious policy. But it’s not hard to explain or advocate for — Americans love Medicare — and it has the potential to build powerful grass-roots support. Pressure from a coalition of left-leaning groups led by the Progressive Change Campaign Committee (a group that fought for the public option in 2009) has encouraged 33 Senate Democrats, including the party’s leadership, to call for a public option. President Obama has started advocating for it again, and Hillary Clinton has embraced it.

Republicans have actually shown how it can be done. Changes in Medicare pushed by President George W. Bush in the 2000s created more competition between public and private plans and guaranteed a fallback public option for prescription drug coverage.

This year, Senate Republicans, providing another lesson, passed legislation that repealed the Affordable Care Act through the budget process, which isn’t subject to a filibuster. (President Obama vetoed it.) If that’s possible under the budget rules, creating a public option should be, too — especially since it could reduce the deficit by tens of billions of dollars a year.

If things keep going as they are, Americans are certain to demand greater regulation of private plans to make them operate more like public plans. Instead, we should make them compete with a public option.