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Lois Quam: Health care needs that public option

  • Article by: LOIS QUAM
  • August 31, 2009 - 11:27 AM

In 1989, I was asked by Gov. Rudy Perpich to chair the Minnesota Health Care Access Commission. The commission's report led to the bipartisan creation of MinnesotaCare, a successful public option that offers health coverage to Minnesotans who work in lower wage jobs. At UnitedHealth Group, I worked with Medicare and Medicaid and saw firsthand the vital role these public options play in our health care system. For health reform to be most effective, a public option similar to Medicare and MinnesotaCare should be available to all Americans.

Despite the criticism the proposed public option has recently received, existing public options like Medicare remain very popular. The Veterans Administration health budget will be significantly increased, and MinnesotaCare has a record number of applicants. These public options provide access to care. They are affordable. They give us peace of mind and security.

There are several advantages to a public plan. It offers a national safety net ensuring that all Americans have access to a good-quality insurance option. Private insurance options are not always available in every part of the country. As it has in Medicare, a public option would guarantee for all Americans that good coverage is available everywhere and all the time.

A public option also provides additional choice. Since the 1990s, Medicare beneficiaries have had a choice of staying with the traditional Medicare program or enrolling in a Medicare Advantage health plan. Many have opted for the opportunities that a health plan offers, but more have opted to stay with the traditional Medicare for the choice and easy access to doctors and hospitals.

A public option, like Medicare, also effectively sets a standard for the marketplace by ensuring that there is pressure to keep administrative costs low and encourage companies to innovate by offering unique benefits above and beyond the Medicare benefit set.

A public option also provides a way to respond to unique public health or security challenges in areas where companies may face shareholder concerns about the financial risk. For example, Medicare expanded coverage to Americans with end-stage renal disease in the 1970s because those individuals were uninsurable in the private marketplace.

But adopting a public plan is not enough. We need to reward doctors and hospitals that are delivering the best care at the lowest cost. Centers of excellence such as the Mayo Clinic are often penalized by Medicare even though they keep Medicare patients healthier, at a lower cost, than the national average. Medicare and the new public plan will also need to provide incentives for innovation.

If the public plan is not included in the final package, health reform falls short. Covering all Americans and controlling costs becomes harder. Americans living in rural and inner-city areas will be disadvantaged. Companies will have insufficient incentives to rein in administrative costs or offer unique benefits.

When we enact universal coverage for a group of Americans, like we did with Medicare or the VA, it works. When we expand coverage, like we did with MinnesotaCare, it works. This year, we can complete the job and deliver more affordable care and coverage to all Americans. Given its historic success, a public option is the right option for health reform.

Lois Quam is the CEO of Tysvar, a strategic advisory firm focused on health care and the new green economy, and is a senior fellow at the Center for American Progress. From 1998 to 2007, she was the CEO of Ovations, a subsidiary of UnitedHealth Group, which provided health coverage to older Americans and low-income families.

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