Health Care Reform: It will Fix the Economy, Cost Less and Save Money. Yet Republicans Hate it?

Let's start with the premise that health insurance companies will be priced out of existence. Good or bad idea? NY Times:

In reasserting his support last week for a new government health plan for the uninsured, President Obama stoked the fears of private insurers that they would not be able to compete with a Medicare-like option and might gradually be priced out of existence. The very point of a federal public plan … would be to take advantage of an enormous risk pool and efficiencies of scale “to make the health care market more competitive and keep insurance companies honest.”

In the free market, buying power matters and keeps prices down. It’s a model Wal Mart has done well with. But that’s a domain left for big business, right? Consumers don’t get the same special privileges as big business, so they can use their own government to purchase health care for themselves. Instead, we should be afraid of reform and saying goodbye to high premiums:

The conservative Heritage Foundation, calls it “a nuclear minefield on the road to universal coverage.”

Wow, with words like “nuclear” and “minefield” in the same sentence, how could you not fear getting low cost universal medical care for your family?

The Obama administration … pointing to the three dozen states that offer their employees a choice between government-backed insurance options and a menu of commercial policies. But health policy experts are deeply divided about whether the state employee plans bear any meaningful resemblance to the public plan options … most are administered by major commercial insurers that are given broad authority to negotiate payment rates with doctors and hospitals. Inaddition, the state plans typically have not used their purchasing clout to control costs, link pay to medical performance or drive other quality improvements. A 2002 study by two policy research groups concluded that state employee plans have been no more effective at controlling costs than private insurers.

Here’s where ideology overrules everything. That highly touted fiscal conservatism we’ve heard so much about doesn’t stand a chance against the fears of “European socialism.” In fact, you would think the first line of the following paragraph would convince even the greediest scrooge in America that a public option makes perfect sense.

But critics argue that with low administrative costs and no need to produce profits, a public plan will start with an unfair pricing advantage.

Yes, and that is the point, isn’t it. That’s why a public plan is such a good idea. But that would also mean lowering the prices paid for services that are now unaffordable to almost everyone, even some insurance carriers. But…

They say that if a public plan is allowed to pay doctors and hospitals at levels comparable to Medicare’s, which are substantially below commercial insurance rates, it could set premiums so low it would quickly consume the market. The Lewin Group projected that a plan paying Medicare rates would prompt 119 million of the 172 million people who are privately insured to switch policies (whilealso providing coverage to 28 million of the 46 million uninsured) … only 12 million people with private coverage would migrate to a public plan if Congress provided protections for insurers, along principles suggested by Senator Charles E. Schumer … (like) promoting a public plan (that would) be subject to the same regulations as private plans and that it pay providers at higher levels than Medicare. (Similar to a plan by) Len Nichols, the director of health policy at the New America Foundation and the co-author of a proposal to level the field through governance and pricing regulations.

Which leaves most of us screaming as we hear and read stuff like this:

The question, at a time of deep concern over health costs, is whether that proposal would compromise away the full potential of a public plan to suppress provider payments and control the growth of premiums.

No kidding.