They say that the devil is in the detail. One detail that very may well devil, if not derail, health-care reform in the United States is whether a public insurance plan will compete with the private insurance industry. President Obama has called for this; insurers are likely to oppose it vigorously. Obama should stick to his guns.
On the surface, it appears that there is enough agreement among unlikely allies in the US for passage of fundamental reform that includes near universal coverage. For example, an organization called Divided We Fail has among its members influential (and very disparate) union, business, consumer, and provider groups. Another example is an alliance between, among others, the American's Health Insurance Plans, the country's leading organization for private insurers, and Families USA, a major consumer advocacy group.
Fundamental disagreements are likely to arise quickly, however. As this is being written, Obama's public pronouncements make it clear that there will be a distinct, government-run alternative to private insurance coverage. One document on his website says, 'If you do not have insurance you can choose to enroll in the new public plan, which will offer benefits similar to what every federal employee and member of Congress gets. Or you can choose private plan optionsy'.
[http://www.scribd.com/doc/191306/Barack-Obama-08-Healthcare-FAQ].
In contrast, the industry's web site states that, 'The worksite should remain the primary source of coverage for working individuals and their families, and the individual insurance market should remain the primary source of coverage for working-age individuals who do not have access to employersponsored insurance' [http://www.ahipresearch.com/PDFs/principles_of_reform.pdf ]. There is no mention of a government plan.
Recent Nobel Laureate Paul Krugman (2007) summarizes the advantages of a public plan option, in the context of a proposal by then-candidate John Edwards: 'The public insurance plan would almost certainly be cheaper than anything the private sector offers right now-after all, Medicare has very low overhead. Private insurers would either have to match the public plan's low premiums, or lose the competition'. Even more telling was the Edwards campaign's statement that, 'over time, the system may evolve toward a single-payer approach if individuals and businesses prefer the public plan'.
[http://johnedwards.com/issues/health-care/health-care-fact-sheet/]. And there's the rub. By having a public insurer compete against the privates, health-care reform that initially relies mostly on private insurers could morph into a single-payer system, which would have little need for private health insurers.
What's to stop Obama's Democratic party from simply setting the agenda? Two things: First, health insurers are an effective and powerful lobby, and second, the Democrats do not have a super-majority in