Health Insurance Premiums And The Public Option
David Williams has written an insightful article about how big business concerns about a public health insurance option might be overly dramatic. I do understand the concerns that business owners have, since they believe that a public option will lead to costs being pushed onto private health insurance carriers, who in turn would charge higher premiums. There is no doubt that businesses have felt the sting of rising health insurance premiums for years now. In Colorado, employer-sponsored health insurance premiums rose by almost 87% between 2000 and 2009, while wages increased by only 20.5% over those years. Employees are increasingly seeing higher premiums deducted from their pay, combined with higher deductibles and copays. But employers still pay the lion’s share of many employees’ health insurance premiums, and the prospect of even higher premiums isn’t likely to sit well with them.
Of course, the question remains as to whether or not a public option would actually cause private health insurance premiums to rise more quickly than they already do. David Williams believes that it would not, and has detailed several reasons for this in his article, which is well worth reading.
I found David’s article in Grand Rounds, hosted this week at Non-Clinical Jobs.
Thanks Louise. Businesses paying insurance premiums for their employees have plenty to worry about and I feel for them!
It seems to me there’s some chance a public option could actually help control costs for businesses by pushing down the market price of physician and hospital services, but I’m not holding my breath.
David, I think that’s a possibility in an ideal world, but I’m not holding my breath either. The AMA and other hospital/physician lobby groups aren’t going to quietly accept lower payments for services. One area where I think we do have room to negotiate is with the pharmaceutical industry, which has been enjoying double digit profits (as a percentage of revenue) over the last several years. So I’m curious to see what prescription coverage (if any) would be contained in the public option.
Working at a doctors office (Family Practice) we deal with Medicare all the time. They are essentially a public option. Our profit margin from Medicare is similar to those from private insurance companies even though Medicare pays 20 to 40% less then the private insurers. The reason for similar profit margin is the low overhead associated with Medicare. They do not require referrals, authorizations, etc. Our nurses spend 40% of there day working on referrals and authorizations. Nurses are our single biggest expense past doctor’s wages. Thats why we would be willing to accept lower reimbursement rates if the proposed public option is run similar to Medicare.