Massachusetts Has Got it Wrong: Why America Needs a True Public Option

By Nicholas Rowe

MassachusettsHCThe health care debate has come to resemble the plot of Samuel Beckett’s Waiting for Godot. Hopelessly locked in a state of despair and confused about the right course of action, Americans are simply waiting for something to happen. Yet this enduring debate is not unique to Obama’s administration. Democrats have been trying for over 75 years to achieve reform. It’s just that now with a Democratic majority and a “progressive” administration, the time is ripe for change – or at least it should be.

Yet we fear change. As a candidate, Obama spoke of a “new public insurance program.” Now, nine months in, he has failed to nurture this alternative. Irrational talk of our ascent into socialism and the creation of grandma-killing death panels has made Obama weakly apologetic and indecisive. Opponents have seized upon these fears to prevent necessary change. Republicans, as always, stand stubbornly firm in their belief that the private insurance industry can cure all, even though it has increasingly sapped the country’s resources and provided inferior care.

The opponents of the public option couldn’t be more wrong. Reliance on the private system has been tried in Massachusetts and it is a failure. Enacted in April 2007, Massachusetts became the first state in the nation to mandate health insurance coverage for all of its citizens. The first step was simple: register 100,000 eligible, but currently unenrolled, citizens for Medicare. But the problem was those people not eligible for Medicare and without employer-provided insurance. The solution was to create the Commonwealth Health Insurance Connector Authority. Dubbed “the Connector” by those in the know, this program pools uninsured individuals and asks private insurance companies to devise affordable options. Unfortunately, asking a profit-driven corporation to offer a profit-cutting plan is like asking a kid to hand over a prized Pokémon card. Additionally, individuals who do not buy health insurance are fined a hefty $1,500 per year.
I will concede that the program appears to be a success on the surface – 97 percent have coverage, the highest of any state. Nationwide, only 85 percent are covered. But problems lurk beneath. Residents have care, but are not always able to use it. Many can still not afford treatments for sicknesses. This is not limited to the marginally poor; individuals earning $32,000, for example, can easily spend close to $10,000 per year for premiums and other payments. And premiums in Massachusetts are rising at the highest rate in the nation–close to 10 percent annually. Costs of emergency room visits are rising again because of the prohibitive cost of proper preventive care. Public opinion reveals the truth. Thirty-seven percent call the health reform an explicit failure and 29 percent said health care has gotten worse.

This does not even begin to address cost to the state. Health care spending has shot up from $630 million in 2007 to $1.3 billion in 2009. Soaring health costs amidst the recession helped to create a $9 billion budget gap, leaving less for education and other essential public services. Per person health care costs in Massachusetts are the highest in the world. So where is all that money going? To private health insurance companies. From 2000 to 2007, profits of the country’s ten largest insurers increased 428 percent. These companies have feasted upon guaranteed issue in Massachusetts – after all, their consumer base was expanded by 400,000 under the reform. It’s no wonder that two weeks after the 2008 election, these companies said they would support greater federal regulation if Congress required everyone to hold insurance!

Obama has said that he does not want to drive private insurers from the market. However, it has become more and more clear that private insurers are not the solution to the problem. Health care costs have risen consistently at twice the rate of inflation, presenting a real danger and imperative for change. If unsolved, health care costs will surely bankrupt the nation and rob resources from our schools, forever putting future generations at a disadvantage.

Now is not the time for Americans to do their own rendition of Beckett’s play. We need a public option, and we need it now. The moral imperative to care for everyone not withstanding, we must do so for a simple fact of economics. The public option would compete directly with private insurance companies. Increased competition will force bloated insurance companies to radically restructure to compete, lowering costs for all. And Obama knows this. If he would just bring down the curtain on this 75-year performance of Waiting for Godot, he just might get us somewhere.

Published with support from Generation Progress.

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