Robert Reich explains the “public option” re health insurance reform.

June 14, 2009 | By | 12 Replies More

In this video at Bill Moyers’ Journal, Bill Moyers and and former Secretary of Labor Robert Reich rolled up their sleeves to discuss Barack Obama’s objectives regarding national health care reform, including the (potentially feasible) “public option” and (not unlikely option of) “single payor.”

The bottom line: Barack Obama has an uphill struggle against some extremely powerful (monied) interests, including the private insurers, pharmaceutical manufacturers and other profit-driven corporations that have each hired fleets of lobbyists yelling “socialism.”

At the 14-minute mark, listen to Reich describe how the financial sector has “pulled the wool over the eyes” of the Obama Administration. He warns that the lobbyists are enormously powerful, and that we need Obama and average citizens to start standing up to the lobbyists. As things are, nothing has fundamentally changed regarding the financial system, other than the financial sector’s new ability to paper over its scandalous practices and its ever-increasing massive transfer of wealth from America’s middle class to the financial sector.

In 1980, the top 1% of the country took home 9% of the total national income. By 2007, the top 1% was taking home 21% of the national purchasing power. Reich explains that the middle class has been drained of financial and government power. What has happened is that “capitalism has swallowed democracy.” Reich explains that when the government fails to set boundaries, we have the law of the jungle, and we then have super-capitalism, which is capitalism without democracy. The culprits were the lobbyists who made sure that there was no effective regulation of the financial sector.


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Category: Health, Medicine

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (12)

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  1. Erich Vieth says:

    Don't believe the lies of the Republicans. The "Public Option" has overwhelming public support.

  2. Erich Vieth says:

    Paul Krugman explains that the public strongly favors the public option. Further, he points out that it is "centrist Democrats" who are the greatest threat to the passage of the "public option."

    Voters, it seems, strongly favor a universal guarantee of coverage, and they mostly accept the idea that higher taxes may be needed to achieve that guarantee. What’s more, they overwhelmingly favor precisely the feature of Democratic plans that Republicans denounce most fiercely as “socialized medicine” — the creation of a public health insurance option that competes with private insurers.

  3. Erich Vieth says:

    Check out this disturbing (yet predictable) graphic from 538. The more money the health care industry provides to politicians, the less they favor the public option. This is truly SICK.

  4. Niklaus Pfirsig says:

    In 1996, under a federal waiver, the state of Tennessee started an an advanced program to administer Medicaid resources in a cost effective manner, Effectively becoming a non-profit insurance insurance for the poor. The project was called <a>TennCare.

    There was a lot of resistance by the insurance industry and many doctors boycotted the system, however in its first few years of operation, TennCare became a model for the single payer concept.

    TennCare was not a socialized system, but relied on privatization by contracting managed care organizations (MCOs) to provide the medical services.

    The program was not without problems. Insurance companies actively campaigned against TennCare, encouraging many physicians and pharmacists to boycott TennCare. There was a considerable amount of fraud by both clients and providers. The client fraud was the typical insurance fraud such as altering or forging prescriptions. The provider fraud almost always escaped media examination and included:

    Massive embezzlement by some of the MCOs

    Multiple billing through shell companies listed as subcontractors that provided no services

    Repackaged billing (e.g. billing insulin syringes at $1 each when a box of 150 sells for $20)

    Payola and bribery to state lawmakers (some of whom were arrested in the <a>Tennessee Waltz sting operation.

    In spite of these problems, Tenncare worked worked very well at provided health services to the poor while keeping the costs ro a reasonable level. However, after 4 years of operation, and under a new administration, insurance regulations were changed. Tenncare became a a dumping ground for the chronically ill cases that the private insurers deemed too expensive for their profit margins and as a result, the system became an easy way for private sector to boost their profits at the taxpayers expense.

    Currently TennCare is being reverted back to the Medicaid system and millions of Tennesseans are being dropped from its services.

    So what killed TennCare?

    Corporate greed, pro-corporation politics and political corruption.

  5. Tony Coyle says:

    I almost find it laughable (if it weren't so serious) the Republicans claim that single payer healthcare is somehow socialist, and akin to 'forced redistribution of wealth'. I also find it disturbing that they opine about private insurance and private medicine as if American health care was, somehow, healthy!

    In fact the opposite is the case.

    Employees and employers spend significant sums that reduce their profits, or their take-home pay, to pay inflated insurance premiums. Medical practitioners are squeezed by insurance companies to accept lower fees for many of their services (resulting in much of the nickel & dime behaviors where each syringe is charged individually rather than at the real 'fractional' cost). In all cases, employees, employers and providers are sacrificing their own profits to enable insurance companies to make profits instead.

    Redistribution of wealth from those producing the wealth to a bunch of parasites who couldn't create wealth if they had the sorcerer's stone.

    So, what do insurance companies do to justify their profits?


    They do not improve choice.

    They do not reduce cost. (has your premium ever gone down in price? – the US still spends significantly more per capita on healthcare than any other industrialized nation)

    They do not improve outcomes. (the US still has the poorest health indices of any major industrialized nation)

    The time for reform is long past due.

    Call your senator and congressperson and support real health care reform,

  6. Mindy Carney says:

    You are so right, Tony! Here are a couple of articles about what a "fine job" insurance companies are doing for the public. First, how they overcharged billions, and second, how they invested billions in the tobacco industry. How's that for "conflict of interest?!" If, of course, your interest is the health and well-being of the population for which you supposedly work.

  7. It has nothing to do with "choice" or anything else. Their reaction to single payer (which these proposals are not) is the idea of accepting that insurance and health care have simply gotten too damned expensive and Daddy is going to come into the room and do something about it. Which means profits will be controlled and limited. That just rankles some people no end.

    "We have a right to run things the way we want!"

    Even if the way they're being run is criminal, horribly inefficient, and ultimately self-destructive. These are small children who don't want their game taken away from them.

    To which I say, "Socialist my ass, you're just greedy bastards."


  8. Niklaus Pfirsig says:

    The insurance companies see the single payer system as a competitive threat to their revenue model. In other words, they would have to become competitive in the market which would mean cutting their profits and maybe even cutting out those non-performance-related "compensation packages" from the (Pirate) captains of the financial industry.

  9. meleze says:

    good evening from Paris

    As you know french citizens are benefiting from the social health care you try to found in the United States. I would give you all my support in your pressure on the President Obama. You failed to mention all the practionners and the advantage they could have to see a part of the medical researches payed by the employers contributions.

  10. Niklaus Pfirsig says:

    In it's original form, insurance is a communist idea. A group of people pooling their money to be available to members of the community when needed. It was a communal rainy day fund.

    Somewhere down the line, insurance became big business. The insurance companies grew in wealth and influence. They gained that wealth by tapping the pooled funds of the community in return for managing those community funds. Insurance permeates American life.

    In the medical industry, the insurance companies have formed an oligopoly by contracting with employers. Workers have a choice between the plan opffer by their employers, or individual plans with even higher premiums.

    A lot of business profits are sucked up by insurance. A lot of employees payche is sucked up by insurance.

    Insurance companies get money from doctors, hospitals and clinics and use medical repricing to pay as little as possible. two reasons American health care is so high are malpractice insurance and insurance billing.

    There are schools that train people to make a career of filling out the nearly incomprehensible paperwork require by the insurance companies so the doctors, hospitals and clinics can be paid.

    Additionally, many health care providers inflate the bill so they won't get screwed by the insurance companies during the repricing negotiations. I think the time is long past due for insurance companies to return to the non-profit roots from which they started.

  11. Erich Vieth says:

    Niklaus: That was a terrific comment about insurance being communist idea that has run amok under the control of big business, and that we need insurers to return to their non-profit roots. How ironic that America's most capitalistic capitalists love such a communist idea! Those simple ideas helped clarify some things I've been tossing around. Thank you.

  12. Erich Vieth says:

    Two major progressive voices in the health care debate took White House Chief of Staff Rahm Emanuel to task on Tuesday for suggesting that a public option with triggers could be a potential compromise on reform.

    One of those voices, Sen. Bernie Sanders (I-Vt.) went so far as to insist that some Senate Democrats would vote against any proposal that didn't include a strong government-run option.

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