Obama and Clinton back Public Option for Obamacare

July 11th, 2016

President Obama authored a “special communication” in the Journal of the American Medical Association titled “United States Health Care Reform Progress to Date and Next Steps.” (I chuckled because his bio line says “Barack Obama, J.D.” as if his law degree matters at this point).

The only newsworthy element of the communication is that Obama has officially endorsed amending the ACA to include a  public option–which was blocked by moderate Democrats back in 2009.

Third, more can and should be done to enhance competition in the Marketplaces. For most Americans in most places, the Marketplaces are working. The ACA supports competition and has encouraged the entry of hospital-based plans, Medicaid managed care plans, and other plans into new areas. As a result, the majority of the country has benefited from competition in the Marketplaces, with 88% of enrollees living in counties with at least 3 issuers in 2016, which helps keep costs in these areas low.57,58 However, the remaining 12% of enrollees live in areas with only 1 or 2 issuers. Some parts of the country have struggled with limited insurance market competition for many years, which is one reason that, in the original debate over health reform, Congress considered and I supported including a Medicare-like public plan. Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers.59,60 The public plan did not make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited. Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.61

Last week, Hillary Clinton’s campaign website also endorsed the public option.

Continue to support a “public option”—and work to build on the Affordable Care Act to make it possible. As she did in her 2008 campaign health plan, and consistently since then, Hillary supports a “public option” to reduce costs and broaden the choices of insurance coverage for every American. To make immediate progress toward that goal, Hillary will work with interested governors, using current flexibility under the Affordable Care Act, to empower states to establish a public option choice.

When I finished writing Unprecedented in May 2013, I fully expected the ACA’s marketplaces to be unsustainable in the long term. From the Epilogue:

If the ACA continues to result in higher premiums and the consequent price controls aimed at controlling these rates nudge insurers to exit the market (insurers are already opting out of California’s exchanges), the mandate may serve as a mere pit stop on the road to single-payer health care (what progressives wanted but did not get in 2009).

I could not have anticipated this would take less than three three years! The marketplaces opened up on January 1, 2014!  And we are already seeing so many insurers exit the markets, that its supporters are backing a public option. The faustian pact the insurers made to support the ACA will become clear as the ACA unravels.