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Health care debate misses the point

Marketplace Staff Aug 20, 2009
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Health care debate misses the point

Marketplace Staff Aug 20, 2009
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TEXT OF INTERVIEW

Bill Radke: We told you this week White House officials appear to be backing away from their insistence on a public health insurance program that would compete with private insurers. This did not go down well with the left — former Democratic National Committee chair Howard Dean said you can’t do health care reform without a public option. Los Angeles Times business columnist David Lazarus says this debate misses the point. Good morning, David.

David Lazarus: Good morning.

Radke: How does the public option debate miss the point? What is the point?

Lazarus: Well the point is really if we have 47 million people in this country uninsured, if we have health care costs running amok, if we have huge premiums to people with health conditions, or people with preexisting conditions being denied coverage — How do you solve that problem? Now a public plan was very attractive to people like me who think a Medicare-for-all system would probably be best for this country, but it’s not the be-all, end-all of health care reform.

Radke: Well the White House made it sound like public option was going to be driving down costs, so if they’re giving that away, what’s the White House get in return?

Lazarus: And that’s a real good question. How are you going to level the playing field against the private insurers since Obama cast this whole thing as the leavening stone for that. More than likely if he’s going to be giving the insurance industry the health care mandate, the requirement that everybody has to take their product — and this is what the industry desperately wants — if he gives them that, and takes the public plan off the table, well in return he can ask for limits on how much the insurers can charge, limits on how much people’s premiums can go up annually, and insurance industry backing for these so-called cooperatives that are probably going to be the best bet to extend coverage to the 47 million who don’t have insurance right now.

Radke: How do you rate this bargain that maybe is going to get struck?

Lazarus: I think it’s going to be not as good as the public plan could have been. We know what the public plan looked like. We know how that would fit into the insurance landscape. We also know that many, many people supported it, which means there would have been customers for the thing. With that out of the picture, the co-ops are much sketchier. The design of these things is going to be crucial. For instance, if you make it too small — do it at the municipal or state level — it’s probably not going to be very effective. You need to do it at the national level. In reality, there’s much less history and track record for these things at a national level.

So does this get the 47 million people who are uninsured covered? We don’t know that yet. Does this protect all those people with preexisting conditions or health problems? We don’t know that yet either. The important thing though — if Obama is going to take the public plan off the table — he’s now able to turn to the insurance industry and its conservative friends and say, ‘look what I’m prepared to do to cut a deal, what are you going to do?’

Radke: L.A. Times business columnist David Lazarus. Thank you.

Lazarus: My pleasure.

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