Mitt Romney For the Public Option?

November 15, 2011
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When the Affordable Care Act was passed, it made it through without the so-called “public option” that progressives everywhere thought would save the U.S. health care system. Quite simply, the public option was to be a federal insurance plan that anyone could purchase, and it was considered a way to increase choice of plans for consumers while keeping insurers accountable by providing a competitive benchmark for cost and quality of coverage.

When the Affordable Care Act was passed, it made it through without the so-called “public option” that progressives everywhere thought would save the U.S. health care system. Quite simply, the public option was to be a federal insurance plan that anyone could purchase, and it was considered a way to increase choice of plans for consumers while keeping insurers accountable by providing a competitive benchmark for cost and quality of coverage.

The problem was, the GOP decided that it hated the idea of competition. Not all competition, mind you, but any competition between the federal government and private industry. Never mind that this is precisely what they put in place themselves with the introduction of Medicare Advantage plans. When the other party’s in power, the playbook reads “Always say no” and thus, the rules changed. Now it appears that Mitt Romney, possible GOP nominee for the 2012 presidential election, favors competition again. In fact, it appears that he even favors the forbidden variety of government-private sector competition.

You see, last week, Romney outlined a plan to reform Medicare if he is elected. His plan gives seniors a voucher, the amount of which is based on their income, with lower income individuals receiving bigger payments, which they can then use to purchase health insurance coverage from either the government’s Medicare program or a private health insurer that offers a plan at least as good as Medicare. In theory, there would be competition, and prices would go down. That’s right, let our seniors shop for the best deal and let private insurers compete against the federal government for their business.

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What’s likely to happen, though, is that private insurers either avoid the Medicare market altogether, or they cherry-pick the healthiest seniors to ensure they can turn a profit as we’ve seen happen with Medicare Advantage. In the former case, there will be no competition to drive down costs. In the latter case, the Medicare market will essentially be segregated into a healthier group with private coverage and a sicker group with traditional Medicare, which will have the effect of making insurers more money and sticking the federal government with the bill. The Romney plan attempts to get around this by requiring the private plans to accept everyone who seeks coverage, but how that plays out is debatable.