public option

Public Option: Optional or Necessary?

Industrialized nations around the world have found a way to ensure health care for every citizen.

In the United States, millions of uninsured people cannot afford to pay for their health care. Who are these people?

The Face of the Uninsured• In 2008 36,560,000 citizens of the U. S. were uninsured• 8 out of 10 of these are members of working families, why

aren’t they insured?– Many employers cannot continue to offer health

insurance, as premium costs are skyrocketing– Employers who continue to offer health insurance have raised

the employee contribution from $1, 543 to $ 3, 515, an amount that many families find hard to afford

– About two-thirds of the uninsured are individuals and families who are poor or near poor. These families must often choose between food and shelter needs and insurance, with insurance getting left out.

• In 2008, there were also 9,140,000 uninsured non-citizens in the United States, which often place a greater burden on the system by not being able to pay for emergency services. This is often the only contact they have with the health care delivery system, which contributes to higher health care expenditures nationwide.

Our civilization and our nation will be judged by how we treat our most vulnerable- Dr. Fizan Abdullah

Health Care Systems of the WorldThe Beveridge Model

• Single Payer System

• Government owns and finances health care for all citizens through taxes

• Government owns and operates most hospitals and doctors

• Uses general practitioners (gatekeepers) which must give a referral for one

to see a specialist

• Takes away choice and has increased waiting times

• The unemployed and poor are provided the same care as everyone that

works and pays taxes (universal coverage)

• Began in Great Britain and is now found in Spain, New Zealand, most of

Scandinavia, and Cuba

The Bismarck Model• Multi-payer System

• Employers and employees split the cost of insurance through payroll

deductions - if you have no employer, the government pays your

insurance

• Hospitals and doctors are private, and there are no restrictions on a

choice of doctors and no gatekeepers for specialist referrals

• Insurance companies, often called “sickness funds”, are mainly non-

profit, private, and must provide coverage to everyone, regardless of

age, health or income.

• Insurance companies are strictly regulated, so this model can achieve

cost control similar to a single payer system

• Access to healthcare is universal, so a patient may see any doctor or

specialist they choose, and the insurance must cover the bill

• This system began in Germany, and is now found in France, Belgium,

the Netherlands, Japan, and Switzerland

The National Health Insurance Model

• Employs parts of the Beveridge and Bismarck models

• Single payer system

• Government owns and finances health care for all citizens through

income taxes paid by citizens

• Doctors and hospitals are private, not government owned

• Uses general practitioners (gatekeepers) for specialist referrals

• Takes away choice and has increased waiting times

• Government is able to control costs by being their own non-profit

insurance company

• Coverage is universal

• This system is found mainly in Canada

The Out-of-Pocket Model• Single Payer System, the patient pays entire cost

• No government involvement

• Most citizens have no access to health care

• Many citizens never utilize the health care system their entire life, for

lack of money to pay medical expenses

• Found in poor nations such as Africa, India, China, and South America

These four models are found in variations in

every country in the world. While none are

perfect, they are being transformed by each

country to improve the health of its citizens.

The United States is unique in that it has a

multi-payer system that incorporates parts of

each model.

How We Mimic That Which WeProfess to Hate

• How we use parts of the Beveridge Model

– The government exercises control over Medicaid and

Medicare funding, the principle insurance used by the elderly,

the disabled, and children of recipients of TANF funding

– Payments to providers are from a set fee established by the

government

– The government is the single payer for users of these health

care services

– The government decides what treatment is payable and

appropriate for these patients

– Gatekeepers are used for referrals


• How we use parts of the Bismarck Model

– Middle and upper class Americans who are subject to

employer-sponsored health care employ a multi-payer model,

each sharing premium costs with an employer, and funds are

paid to private insurers.

– Hospitals and doctors are private, depending on the plan,

gatekeepers may or may not be necessary for referrals

– The difference between the U.S. and other countries is that the

other countries that use the Bismarck model have a plan to

cover everyone, and do not make a profit


• How we use parts of the National Health Insurance Model

– The elderly work their entire lives paying into an insurance fund

by income taxes, to use it when they are older (Medicare, a part

of Social Security benefits)

– Single Payer type of insurance

– Government controls the payments to providers

– Hospitals and doctors are private

– Uses gatekeepers for specialist referrals

– The difference is that in other countries that use The National

Insurance Model, the government is its own insurance company


• How we use parts of the Out-of-Pocket Model– Single payer system, the patient pays entire cost– This is used by the working poor, who cannot afford the high

cost of premiums– No government involvement for these individuals– The difference is that if they cannot afford to pay the costs,

they still obtain health care, and expenses may be absorbed or counted as a loss by the hospital, increasing health care expenditures nationwide

Was it Always This Way?

History of Health Care in the U.S.

• Early 1900s – 1930– Before 1929 most benefits were paid to private hospitals and doctors

out-of-pocket– Capitation began at Baylor Hospital in 1929, with a private, pre-paid

plan using a predetermined fixed fee per month for teachers

• 1930s– The Blue Cross Commission takes over the insurance function and

becomes the Blue Cross Association– Blue Shield was added to provide affordable outpatient care– Blue Cross/Blue Shield began as a private, non-profit insurance

company– Everyone paid the same regardless of age, sex, or preexisting condition– The success of Blue Cross/Blue Shield prompted for-profit insurers to

enter the market


• Post 1930s - 1965– For-profit insurance companies gain market share by “cream

skimming”- mainly covering those who are the healthiest, and ignoring the sickest to increase profits

– Higher premiums were charged to those in certain criteria such as age, gender, health status, and pre-existing conditions

– The success of for-profit insurance companies pushed Blue Cross/Blue Shield to become for-profit as well

– This system gained much popularity, with more and more employers offering insurance, and is mainly used today

– This system provided no coverage for the poor or elderly and was not affordable to those with no employer-sponsored insurance

– Medicaid and Medicare were established in 1965, to provide a government financed way to obtain insurance for the elderly, the disabled, and the very poor, and these programs helped achieve the highest rate of access to health care the US had ever seen


• Post 1965 to Present– There are still 45.7 million uninsured in the U.S. today. What have we

done to we reach them?• In 1997, the State Children’s Health Insurance Program (SCHIP) was

instituted to cover children under 19, whose parents earned too much to qualify for Medicaid for their children.

• In 2006, Medicare Part D was initiated to assist the elderly with prescription costs.

– So children from poor families and the elderly are covered-What about the middle and working classes?• If we are working, we rely on employer-sponsored plans if available

or private insurance plans• If we are not working, we rely on COBRA or out-of-pocket payments

for our health care needs

The New Middle and Working Class

• Increasingly high numbers of the working and middle class have suddenly found themselves without a job between 2007 and 2009 as the economy crumbled, beginning with the collapse of the credit and auto industries, which spread throughout the manufacturing sector

• Many are considered either underqualified for new positions as they have worked the same job with no new skills for decades, or overqualified for the positions that are now available

• Those of us who have lost our jobs have also lost our insurance, and those who lost it prior to March 1, 2009, when the new COBRA law went into effect, were unable to afford continuation of our insurance. Many of those who were able to continue coverage were only able to do so for a short time, having to choose between house payments and increasing food costs and their insurance.

• The new COBRA law was a valiant effort to help those who have lost their jobs continue their insurance, but came too late for many of us.

• With acute illnesses such as the Swine Flu Pandemic, and chronic illnesses such as Heart Disease on the increase, and which affect many who have been out of work beyond the limit for COBRA, how will they survive to work again, and be a productive member of society?

• Obama has devised a health care reform plan, but what is it, will it cover all Americans, and will it reach us in time?

Current Health Care Proposals Being Considered

Obama’s Health Care Plan

Current Reform Proposals

• Obama’s Plan– Plan to increase competition in the health care delivery market– Plan to increase quality and access to care while cutting costs in health

care delivery– The creation of a National Insurance Exchange

• The exchange proposed is a warehouse of sorts for the various public and private plans in existence, and is designed to provide consumer choice, and inspire competition in the market

• A state-wide exchange would give power to the states to create and run it, and would be valid only in that state

• A nation-wide exchange would give power to the federal government, and would be valid in all states

• A nationwide exchange is the strongest option for competition while increasing efficiency and lowering costs

– Plan to include a public option to make health care accessible to all employers and citizens• The public option is the largest issue to date, but what is it?

What Is the Public Option?

• The Public Option is a government-sponsored public plan much like the private plans now used, that employers and citizens alike can use to fund health care expenditures

• Options for its funding– Self-sustaining, meaning it is funded solely by those who buy into the

program– Federally subsidized by taxes

• Options for State Implementation– State run, with each state setting the guidelines for its operation– Trigger-effect, which would not be implemented unless private insurers

could not keep costs down or find a way to cover those with pre-existing conditions, then it would be implemented

Who Would Benefit From a Public Option?

• In our current system, health insurance is voluntary• Those who purchase health insurance are also the ones who use it most,

keeping costs rising• Many officials and professionals believe that by having younger, healthier

people in the plans, the burden is shared for the costs of those already aged or with chronic conditions requiring costly services.

• A public option will help younger paying individuals as they age and need more services in the future to keep costs down, and will spread the cost of health care more effectively across the board

• Who will benefit most from a public option?– Those who cannot already take advantage of an employer-sponsored

plan (unemployed or plan not offered)– Those with pre-existing conditions who are denied private plans– Young, healthy persons who would find it a cost-effective way to

purchase insurance for the long haul

Pros of a Public Option• Lower Premiums

– There would be more people paying into the program, driving premium prices down

• No Profit Margin or Tax Liability– Plan funds would have federal or state funds to pay for them, so would

not require tax hikes to increase profitability, as governments are non-profit entities

– As they would not make a profit from premiums, they would not be subject to taxation

• Bargaining Power– Insurance companies would have to compete with public-funded

programs for customers. Having such a large group to contend with would force private companies to keep the cost of premiums down, and give customers better deals to stay competitive

• Portability of Coverage– With a public option, an individual could change jobs or move and keep

their insurance coverage. Depending on whether it is federally or state funded, one could go anywhere in their state or country and stay covered with this type of plan

Cons of a Public Option• Private Insurance Companies

Would Go Out of Business– With such a large, profitable group to compete with, insurance

companies fear they could not afford the current levels of service to customers and still pay their investors

• Lower Provider Payments– Some physicians now refuse to take Medicaid patients because they do

not get reimbursed enough for their services from Medicaid payments. With another public program, they worry they will receive even less. Not all doctors enjoy high wages, some rural doctors make just enough to get by

• A Single-Payer System Might Emerge– Many people fear government intervention in individual affairs, and

dislike the idea of a single-payer system run by the government– The introduction of a public option would cause many to choose that

option, and many believe it may well be the first step towards a government-run, single payer system in the U.S., much like that in other countries

Pros vs. Cons: Who Wins?• The pros clearly outweigh the cons in this case,

as the points against the public option are weak– Other countries with a national health plan also have some private

insurance plans available to supplement the public plans, suggesting that private insurers would not go out of business with a public option plan

– The point that many physicians fear lack of reimbursement seems ill-founded in that a majority of physicians support the public option

– The point that people fear a single-payer system also seems to be ill-founded in that a majority of the public supports both a public option, and national health care for all citizens

– Long wait times have been cited as a downfall of the public option, but the uninsured and underinsured wait until it is too late for quick treatment in many cases, then have no choice but to visit the Emergency unit of a hospital- Talk about wait times and choices!

– The fact is, the majority of the general public, as well as many providers support a single-payer, Universal Health Care Plan

The Conclusion• As long as we take care of both patients and

providers, it is clear a public option is necessary• A measure of a country is how they take care of

their citizenry- it is a moral issue– In most industrialized countries, all citizens are treated

equally in the health care arena– Though patients must often wait for treatment of non-

emergency conditions, the rich and the poor wait an equal amount of time, suggesting solidarity among people that apparently America does not share

– It takes a true moral commitment to serve the citizens of a nation and succeed in developing a health care system that encompasses all persons, regardless of status in the community

Making It Happen• How can each of us assist in accomplishing our

task to provide dignified health care for all citizens?– GET INVOLVED in the process!

• Be informed• Vote (also run for office if you have the desire and abilities)• Write and call your representatives• Write a letter to the editor of your local paper• E-mail your senators• Attend rallies and talk to your friends and family

– We must show them by sheer numbers that we stand together in solidarity to obtain a pubic option in health care – not just today, but ongoing

– Let us make certain all of us are assured a government-protected right to good health in our quest for life, liberty, and the pursuit of happiness, rights which are already protected by our constitution!

CreditsProduced and Directed by: Eric Enright and Dianne Drinkard

Sources:Barack Obama and Joe Biden’s Plan to Lower Health Care Costs and Ensure Affordable, Accessible Health Coverage for

All – http://www.barackobama.com/pdf/issues/HealthCareFullPlan.pdfCarmichael, M: For Kids, Being Uninsured Can Be a Killer –

http://blog.newsweek.com/blogs/thehumancondition/archive/2009/10/30/for-kids-being-uninsured-can-be-a-killer.aspx

Henry J. Kaiser Foundation: The Uninsured, a Primer – http://www.kff.org/uninsured/upload/7451-05.pdfHenry J. Kaiser Foundation: Poll: Majority of Doctors Support Public Option -

http://www.medicalnewstoday.com/articles/1640083.phpJames, R: Which Americans are Uninsured? – http://www.time.com/time/health/article/0,8599,1930096,00.html

Klein, E: A Market for Health Reform -http://www.washingtonpost.com/wp-dyn/content/article/2009/07/28/AR2009072802114.html

National Coalition on Health Care: Health Insurance Costs - http://www.nchc.org/facts/cost.shtmlNeale, T: Nationwide Protests Support a Single Payer Healthcare Plan -

http://www.medpagetoday.com/PublicHealthPolicy/HealthPolicy/9889Shi, L. & Singh, D. A: Delivering Health Care in America: A Systems Approach (2008)

Reid, T.R: No Country for Sick Men- http://newsweek.com/id/215290/Torrey, T: Public Option Health Insurance Pros and Cons –

http://patients.about.com/od/healthcarereform/a/publicoption.htm

Image SourcesSlide 1, 3, & 14 images by Dianne Drinkard & Eric Enright

Slide 2 image obtained from http://www.oldamericancentury.orgBackground flag images obtained from http://www.wpclipart.com/flags/Countries/index.html

Slide 18 cartoon obtained from http://www.time.com/time/cartoonsoftheweek/0,29489,1930866_1968779,00.html Slide 19 flowchart obtained from http://okpolicy.org/blog/health/health-insurance-reform-explained-in-three-steps/

Slide 26 image obtained from http://commons.wikimedia.org/wiki/File:Goddess_of_justice.jpg

Slide 28 image obtained from http://www.archives.gov/education/lessons/constitution-workshop/images/Constitution

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