How Private Insurers Stand to Prosper Even More

Originally at Robert Reich's blog

December 14, 2009 -- The public option is dead, killed by a handful of senators from small states who are mostly bought off by Big Insurance and Big Pharma or intimidated by these industries' deep pockets and power to run political ads against them. Some might say it's no great loss at this point because the Senate bill Harry Reid came up with contained a public option available only to 4 million people, which would have been far too small to exert any competitive pressure on private insurers anyway.

To provide political cover to senators who want to tell their constituents that the intent behind a robust public option lives on, the emerging Senate bill makes Medicare available to younger folk (age 55), and lets people who aren't covered by their employers buy in to a system that's similar to the plan that federal employees now have, where the federal government's Office of Personnel Management selects from among private insurers.

But we still end up with a system that's based on private insurers that have no incentive whatsoever to control their costs or the costs of pharmaceutical companies and medical providers.

Read More at Robert Reich's Blog >>