Calling the insurance industry’s bluff

CALLING THE INSURANCE INDUSTRY’S BLUFF…. I believe it was David Jackson, from USA Today, who suggested to the president this afternoon that a public health care option would “drive private insurance out of business.” I thoroughly enjoyed the Obama’s response.

“Why would it drive private insurance out of business? If private insurers say that the marketplace provides the best quality health care; if they tell us that they’re offering a good deal, then why is it that the government — which they say can’t run anything — suddenly is going to drive them out of business? That’s not logical.

“Now, the — I think that there’s going to be some healthy debates in Congress about the shape that this takes. I think there can be some legitimate concerns on the part of private insurers that if any public plan is simply being subsidized by taxpayers endlessly that over time they can’t compete with the government just printing money, so there are going to be some I think legitimate debates to be had about how this private plan takes shape.

“But just conceptually, the notion that all these insurance companies who say they’re giving consumers the best possible deal, if they can’t compete against a public plan as one option, with consumers making the decision what’s the best deal, that defies logic, which is why I think you’ve seen in the polling data overwhelming support for a public plan.”

I don’t know the president personally, but I got the sense he actually enjoyed making this argument. In effect, he said, “If the insurance companies are telling the truth about the service they’re providing to their customers, they have nothing to worry about. And insurance companies couldn’t possibly be lying, right?”

Indeed, it’s been the underlying point all along that usually goes overlooked in media coverage. A public option, critics tell us, would provide a horrible, bureaucratic service for customers, including rationing and long waiting times. But here’s the follow-up: if that’s true, no one would choose the public option and insurance companies would be just fine for the indefinite future.

Except, of course, insurance companies and their policymaking allies know better. Which is why they’re panicking.

Obama returned to the subject later during the press conference.

“… I think that there is a legitimate concern, if the public plan was simply eating off the taxpayer trough, that it would be hard for private insurers to compete. If, on the other hand, the public plan is structure in such a way where they’ve got to collect premiums and they’ve got to provide good services, then, if what the insurance companies are saying is true, that they’re doing their best to serve their customers, that they’re in the business of keeping people well and giving them security when they get sick, they should be able to compete.

“Now, if it turns out that the public plan, for example, is able to reduce administrative costs significantly, then you know what, I’d like the insurance companies to take note and say, ‘Hey, if the public plan can do that, why can’t we?’

“And that’s good for everybody in the system. And I don’t think there should be any objection to that. […]

“[Y]ou know, I take those advocates of the free market to heart when they say that, you know, the free market is innovative and is going to compete on service and is going to compete on, you know, their ability to deliver good care to families.

“And if that’s the case, then this just becomes one more option. If it’s not the case, then I think that that’s something that the American people should know.”

I’d just add that it’s very encouraging to hear the president issue such a forceful defense of the public option. He wasn’t prepared to draw a line in the sand and vow to veto a reform package if it lacked a public option, but he not only made his priorities clear, he also issued a spirited argument in support of a public plan.

Here’s hoping the “centrists” in the Senate Democratic caucus were listening.