A Government Take-Over of Healthcare?

The President has released his proposed health reform plan. Republicans like John Boehner, R-OH, are already denouncing it as "the same massive government takeover of healthcare." Frank Luntz, a pollster and "word doctor" for conservatives, knows those words will poll well. After all, who wants a government takeover of anything? But is it true, even remotely? No!


If we truly had a government takeover, companies like Aetna and Beema would be out of business, and insurance would be provided by government. If we truly had a government takeover, Aetna wouldn't be able to delay or avoid paying for covered services, like Aetna is doing here. If we truly had a government takeover, companies like Beema would not be able to sell worthless "insurance" policies to unsuspecting and vulnerable families as Beema did here. Because the plans which passed Congress, and the plan proposed by President Obama are not a government takeover, Aetna and Beema will still be in business. Aetna will still be able to delay or deny payment based on arguments about medical necessity.  Beema will still be able to sell limited benefit health policies, although because government will impose some discipline, these sham policies will not be able to be sold on the insurance exchanges that will create a more competitive marketplace for individuals and small businesses to find coverage.


Most of us will continue to obtain our health insurance coverage from our employers or from individual health insurance companies. Just like we do today. Doctors and hospitals will continue to operate as private practices and as for-profit or not-for-profit corporations.  Just as they do today. Entrepreneurial third-party claims administrators and major insurers like Aetna, CIGNA, United Healthcare and Wellpoint will continue to pay claims for self-funded health plans.  Just as they do today. Utilization management companies, pharmacy benefit management companies, PPO and HMO managed care networks, employee benefits consultants and reinsurance carriers will continue to operate as private businesses. Just as they do today.  Pharmaceutical companies like Merck and Pfizer will continue to market new drugs until patents expire and manufacturers like Teva and Mylan will continue to sell generic drugs. Just as they do today.  There won't even be a "public option" if the President's plan is passed as proposed. Medicare will continue to cover those 65 and above, but the donut hole for prescription drug coverage will be closed, providing important additional financial security to seniors. Most individuals without coverage by a group health plan will get financial support to help pay health insurance premiums to private health insurance companies. Medicaid enrollment will be opened to anyone under age 65 who earns up to 133% of the federal poverty level. With annual health coverage for a family running about $15,000, it is hard to argue that Medicaid is being expanded excessively.

 Current Poverty Guidelines for the 48 Contiguous States

and 133% of that Level

Persons in Family	Poverty Guideline (1)	133% of Poverty Guideline (2)
1	$10,830	$14,404
2	$14,570	$19,378
3	$18,310	$24,352
4	$22,050	$29,326
5	$25,790	$34,301
6	$29,530	$39,275
7	$33,270	$44,249
8	$37,010	$49,223
For families with more than 8 persons, add (1) $3,740 for each person or (2) $4,974 for each person.

Yes, government will be involved a bit more, but in the small ways in which it is involved today. Health insurers will no longer be able to deny coverage because of pre-existing conditions. Because major employers usually avoid imposing pre-existing conditions, and because all of us will need to have health insurance, this will not represent an impossible burden for the gaggle of individual and small group insurers that sell their products to individuals and small businesses. All health plans will need to provide benefits for preventive care, something enlightened corporations have been doing for a generation or so, but which are currently not included in most individual and small group health plans. Families will be able to provide health insurance coverage to dependent adult children until they are 26, providing important protection to young adults after graduation from high school and college. One out of three young adults aged 18-24 are currently uninsured. After high school, some young adults don't want to go to college, and as a result, are currently not eligible to be covered by a parent's health plan. Sometimes those that do go to college can't go full time. Some college students need to work to pay tuition, and college students that are not full time can't be covered by a parent's health plan. After college, some young adults find it difficult to find employment that includes health benefits, until they gain some work experience, and these individuals are not currently able to be covered by a parent's health plan.


For another set of arguments on why the health reform proposals recently passed by the House and Senate are not a "government takeover of healthcare," see Princeton health economist, Uwe Reinhardt's excellent blog on this topic here.


What would a "government takeover" really look like. Go to Great Britain, where all citizens are covered by a government provided health insurance plan, where most hospitals are owned by the government, and where most physicians are employees of the government. The plan proposed by President Obama, or the plans passed by the U. S. Senate and House are far, far away from a government takeover of healthcare.