Comments on: Public Option as Private Benchmark

By: Competition in the Insurance Marketplace and its Effect on Quality: Valuable Considerations for Future Reform : HEALTH REFORM WATCH

Fri, 03 Jul 2009 05:52:38 +0000

[...] competition would force plans to compete on quality. However, as Professor Frank Pasquale has pointed out, there are a variety of activities that insurers engage in to compete, such as “cream [...]

By: Paging Dr. Gawande: Health Reform Matters : HEALTH REFORM WATCH

Paging Dr. Gawande: Health Reform Matters : HEALTH REFORM WATCH — Wed, 24 Jun 2009 14:04:27 +0000

[...] First, the public option is not designed to displace private insurance. It’s supposed to be a benchmark for private plans, to incentivize them to act more constructively. Second, Gawande is here invoking [...]

By: Making the Case for the Public Plan, Part II: Public Option as Private Benchmark : HEALTH REFORM WATCH

Mon, 15 Jun 2009 22:36:27 +0000

[...] X-Posted: Concurring Opinions. [...]

By: Business & Finance Blogs » Blog Archive » What does the public plan equilibrium look like?, part III

Thu, 11 Jun 2009 15:08:09 +0000

[...] still thinking about this topic and I will refer you to a response by Frank Pasquale. He knows a lot about the topic but I'm still not sure how to translate his points into [...]

By: Etl World News | What does the public plan equilibrium look like?, part III

Etl World News | What does the public plan equilibrium look like?, part III — Thu, 11 Jun 2009 04:09:27 +0000

[...] still thinking about this topic and I will refer you to a response by Frank Pasquale. He knows a lot about the topic but I'm still not sure how to translate his points into [...]

By: JP

JP — Wed, 10 Jun 2009 16:12:29 +0000

Frank- Thanks for responding. I was thrown off by this sentence: “Risk-adjustment should not be seen as a subsidy—rather, it’s a way to keep a level playing field between the public and private plans.” Keeping a level playing field might be a reason to subsidize high-risk plans, but it’s still a subsidy, and I don’t understand a reason for seeing it as anything else.

Also, if we can and will impose risk-adjustment and transparency on private insurers, then those are no longer advantages of a public option.

By: Frank

Frank — Wed, 10 Jun 2009 15:42:35 +0000

@James: I agree, but I’ve been nudged toward thinking that behavioral economics-style methodological individualism is the far limit of progressive policy rationales these days.

@JP: You’re welcome! I’d pick the latter option. That would penalize the worst risk-selectors and reward the plans that take more than their fair share of the chronically ill. If we don’t have that type of adjustment, the public plan threatens to become something like Medicaid.

@Joe: In terms of “people we haven’t met,” this is an interesting argument:

http://newmatilda.com/2009/05/20/its-not-their-money-its-our-money

“Paying tax is no different to paying for a gym membership, writes Joseph Heath. It enables collective, cross-subsidised ownership.”

I’m wondering if Grover Norquist et al. are going to attack gyms next!

By: Joe

Joe — Wed, 10 Jun 2009 15:02:29 +0000

Universal healthcare is always going to be expensive and I don’t think we should delude ourselves into thinking anything else. I guess the real question is how much are we willing to pay (in taxes) for people we’ve never met to have health insurance?

By: JP

JP — Wed, 10 Jun 2009 14:55:27 +0000

Thanks for the great posts on this topic.

Do you think private insurers will increase risk adjustment in response to market pressures created by the availability of a public option? Or are you suggesting that risk adjustment should be done through a centralized policy (e.g., low-risk plans will be taxed and/or high-risk plans will be subsidized)?

By: James Grimmelmann

James Grimmelmann — Wed, 10 Jun 2009 05:02:26 +0000

If this “Coverage Facts” is the **simplified** version, then we’re probably better off admitting that individuals can’t make good health insurance decisions in the presence of more than one choice.