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The Schumer Compromise
Jason Rosenbaum summarizes Chuck Schumer's compromise healthcare proposal as follows:
# The public plan must be self-sustaining. It should pay claims with money raised from premiums and co-payments. It should not receive tax revenue or appropriations from the government.
# The public plan should pay doctors and hospitals more than what Medicare pays. Medicare rates, set by law and regulation, are often lower than what private insurers pay.
# The government should not compel doctors and hospitals to participate in a public plan just because they participate in Medicare.
# To prevent the government from serving as both "player and umpire," the officials who manage a public plan should be different from those who regulate the insurance market.
Given Schumer's ties to the insurance industry and, more importantly, the key role he plays in raising money for the DSCC, this plan shouldn't surprise anyone. The philosophical authorship is clear: Beltway lobbyists. The insurance companies, who have recently promised to, at some point, cut their rate of growth - revenue, cost and profit - to a mere 1.5% per annum. Clearly, sacrifices are being brought. Originally, the insusres had offered to cut costs by the same percentage.
In terms of financing, no, the public plan does not need to be self-sustaining. Very few government line items pay for themselves. That's why we pay taxes. The President campaigned last year on raising taxes on the wealthiest Americans to make this work. A self-sustaining plan creates zero public benefit. It does create yet another insurance company, because presumably, we need more of those.
In the same vein, the idea that the public plan should pay more than Medicare to providers is absurd. The reason that program delivers such value is that its purchasing power allows it to operate more cheaply. That's also why Medicare is so popular, presumably.
Should the government compel doctors to work within its new plan? It won't have to, especially if doctors get to bill more than they do for Medicare patients.
And lastly, the play and umpire problem. Sure: build Chinese walls such as presently exist between various government departments. It's unclear why this is one of the four key components of the plan, but it's not as bad and damaging an idea as the rest of this.
It's time to realize that the American insurance-based model of healthcare has failed, and act accordingly.
