June 11, 2009
To understand the financial stakes involved in the battle over U.S. health-care reform, it's useful to keep two numbers in mind: 50 million and 119 million.
The first number is the approximate total of Americans without health insurance, a new market that the private health insurance industry is salivating to get its hands on. The industry's hope is that the government will mandate that those Americans sign up for private insurance and offer subsidies for those who can't afford to pay the premiums.
Fifty million new customers and government largesse to help pay the bills would be a huge windfall for the insurance industry, which otherwise faces a decline in its market because Baby Boomers are reaching the age to qualify for Medicare and because rising unemployment is draining the pool of Americans who have insurance through their employers.
So, as Washington Post columnist E.J. Dionne Jr. noted, the 50 million potential customers explain why the insurance companies have been so eager to sit down at the reform table.
"Their public-spiritedness reflects enlightened self-interest," Dionne wrote. "Health-care reform could bail out these interests by adding the currently uninsured--fast approaching 50 million people--to their customer base and by preventing more individuals and employers from dropping insurance altogether."
But Dionne and other mainstream analysts miss the significance of the other number--119 million--and why it is even a more powerful incentive for private insurers to have the ear of key members of Congress and White House insiders. It is the figure that the industry and its backers cite as the potential exodus of disaffected customers to a public health insurance option.
The industry's curious argument is that so many Americans would bolt to a government-run program that the option simply can't be allowed.
"As many as 119 million Americans would shift from private coverage to the government plan,"- one of the industry's chief protectors, Sen. Chuck Grassley, R-Iowa, wrote in a column for Politico.com.
Though some analysts question the 119 million estimate, it has transformed the debate over health-care reform into something of a death match for the private insurance industry, especially because it's a good bet that many of the 50 million uninsured also would opt for a public plan, since they've been heartlessly left out in the cold by the private industry.
President Barack Obama says he strongly supports inclusion of a public option in any reform legislation as necessary to keep the private industry "honest." His reference to the public option during a speech on Thursday in Green Bay, Wisconsin, was greeted with some of the strongest applause as was his reference to prohibiting insurers from denying someone coverage because of a "preexisting condition."
One of the most offensive features of private health insurance plans has been the denial of benefits if industry investigators determine that a serious illness might have predated the start of a person's policy. Some policies for individuals and small businesses even require the signing of privacy waivers so the insurance company can examine a doctor's confidential files looking for evidence of a precondition. 1 | 2
During Campaign 2008, Obama frequently described how his cancer-stricken mother on her sick bed had to fight with her insurance company about its contention that her cancer was a preexisting condition and that she therefore would have to pay for her treatment out of pocket.
Despite similar horror stories, which are common among Americans as they navigate through the profit-driven medical industry, nearly all Republicans and some "centrist"- Democrats--like Sens. Kent Conrad of North Dakota and Max Baucus of Montana--have voiced opposition to offering an attractive government-run insurance option.
Conrad, chairman of the Budget Committee, has suggested the creation of a privately run "cooperative"- as an alternative to a government-administered plan. Baucus, the Finance Committee chairman, has suggested that Congress might need to "sculpt" a public option, presumably to make it less attractive.
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