Among the myriad reasons to elect Hannah Pingree governor this fall, one policy she is pushing stands out — her intention to create a public health insurance option in Maine.
Having Maine create a government administered health insurance plan would be transformative for Mainers, in part because the state can do things private insurers can’t. Or won’t. A publicly-administrated insurer could negotiate much better prices for all the stuff the medical industry is making money off of (drugs, devices, executive salaries, middlemen who do nothing but take a cut). It could cap out-of-pocket costs at levels which won’t bankrupt families and it could cap profits made at the expense of those who need health care most but can afford it the least.
In a nutshell, if you’re not familiar, the “public option” is where the government becomes one of the many possible insurers competing in the market. Because the government is not seeking to make a profit, and because it is the largest economic force in our state, it has much more power to negotiate better rates for consumers.
Additionally, for all the capitalists out there who love competition, having a public option in the marketplace forces private plans to be more efficient and find more cost savings if they want to compete. This is especially helpful in rural areas where we see fewer providers, since the populations are so low (take notice Republicans).
And, perhaps most importantly, beyond bringing down costs, a public option can cover everything and everyone who needs it.
This isn’t a new concept for the US — there was supposed to be a public option at the federal level in ObamaCare. Unfortunately, moderate Democrats, in particular Joe Lieberman, excised it from the final plan because of how much money they got from the insurance industry. While the ACA is still far superior to what we had prior, excising the public option is the single most significant reason on why it has not been able to control costs anywhere close to what has been needed.
Subsequently, a few states (Washington, Colorado, and Nevada) have tried their own public options. The problem with all three, though, is that they are not true “public” options. They are public-private partnerships, leaning heavily on the private. Basically, the state allowed a private insurance company to do the insurance part, while simply telling those companies what they had to cover.
That means the insurance company still gets to take their cut, thereby limiting savings.
For Hannah to get this right, she needs to make it a pure public option. The simplest way to do this could be to extend Mainecare to anyone who wants to buy in at rates based on income. This is our program for low-income adults, paid for and administered entirely with public money (state and federal). Out-of-pocket costs for the insured are extremely low (deductibles are almost non-existent and co-pays literally cap out at $3 for drugs).
Another option is to simply extend the state employee health program to everyone that wants to buy in. The costs are all covered publicly, with only a small private partnership to pay for the administration of claims. Anyone who has been on the state plan (yours truly included) will tell you it is the best insurance they have ever had. Low deductibles, very small co-pays, benefits that meet the need.
Currently there are 26,000 Mainers in the state plan with premiums ranging from under $50 for an individual to no more than $450 for a full family, based on income. Imagine the negotiating power if the premiums state employees pay were offered to all Mainers?
However she does it, the fact that she is leading with this proposal bodes well for all of us. Assuming she follows-through, which seems highly likely, we will all be looking at lower premiums, expanded coverage, and, perhaps, just perhaps, this will be a step toward helping the federal government see the importance of finally enacting Medicare for All.
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