So apparently Obama has decided he wants to be a one-term president; honestly dude, if you want to quit, there’s nothing that says you can’t do it right now… although if Biden was President we’d end up invading Mexico to stamp out the horrors of marijuana, only to end up in a nuclear shooting war with Russia because of some halfwit comment he makes to Putin at the next G8 summit.

I digress; basically, Obama looks to be ditching the public option in his healthcare ‘reform’ bill. The reform part of the bill consisting almost entirely of, well, the public option.

Further, it appears that after ditching the public option they want to slash the subsidies that will allow people to try and afford the lousy private health insurance they will now be forced, by law, to purchase, or else face a substantial fine. Dday sums it up well here:

Practically all of the money spent in this health care bill goes to two things – expanding Medicaid and subsidies for individuals to buy insurance. That’s it. Reducing the cost of the bill either keeps more people off Medicaid or reduces the subsidies, making forced insurance under an individual mandate unaffordable.

So Obama’s plan boils down to the following:

1) An utterly massive bailout of the insurance industry, forcing millions of people who can’t afford to purchase insurance to do so anyway, with no significant cost controls.
2) Meaningless ‘reforms’ such as a ban on rescission and pre-existing condition exclusions*
3) Set up an ‘insurance exchange’ in a few years that will accomplish absolutely nothing, except perhaps to funnel more cash to a handful of insurers**
4) Lose the House in 2010, the Senate and Presidency in 2012, and perhaps retire somewhere in Europe as the country burns to the ground.

This plan does nothing to stop premiums from going into the stratosphere, it does nothing to keep the insurance company from using trickery to avoid paying, like delaying payments, requiring a ton of paperwork, preauthorizations, network/out of network bullshit, bribing doctors to lie to you and force you into cheaper care or no care at all, etc etc. It will absolutely not stop the meltdown of the US healthcare system in any way; all it does is provide some outright silly guarantees (the insurance company won’t drop you.. why would they ever want to?) (they won’t deny you if you have a pre-existing condition… why would they want to, when they can charge whatever they like in premiums and you have to buy insurance or you lose 2.5% of your income to the IRS?)

*These are the two big selling points Obama uses in his speeches, that the insurance company won’t be able to drop you when you’re sick, or refuse to cover you if you have a pre-existing condition, say, diabetes. However a cursory examination of, you know, reality, shows that these provisions are pointless without cost control. To wit, many insurance companies don’t drop you if you get sick now, or absolutely deny you a plan if you’re likely to cost them money; they simply jack the premium so far into the stratosphere that you can’t afford the plan. Or they force you to get a plan that has such a high deductible you can never use it, or they put a low lifetime limit on payments and force you out that way. Oh, and by the way, the limit for out of pocket costs, aka deductibles, under the House’s plan is 10k per year, per family (5k per individual). There doesn’t seem to be a limit on premium costs in addition to that.

**The exchange has more rules and regulations, to try and prevent the insurance companies from offering truly and utterly worthless healthcare, but… they get subsidies in exchange. So sure, your insurance might not be a complete and total fraud, but you get to pay for it twice, once to the IRS, once to, say, Blue Cross. So the insurance companies win coming and going. If there is an exchange, they don’t have to participate at all. If the bribes to participate are high enough, they can offer a lousy plan, overpriced, and know that people *have* to purchase something, so they’ll take that rather than get a fine and no coverage whatsoever. You still pay far more than our competitors overseas and get far less.

A public option would remedy many of these problems. The insurance companies couldn’t ignore the exchange, because there would always be at least one honest broker who would operate high quality care at rock bottom prices in the exchange. Over time, gradually, almost everyone would become eligible for the public option, as you become eligible whenever you’re not covered by an employer, and once eligible, you’re eligible for life, more or less. A well run public plan would by definition wipe the floor with private insurance and eventually absorb more or less the entire market, save for premium services. That’s how it works in most countries that have public insurance and private insurers competing, like Germany, England, etc. It’s not as efficient as single-payer, but Americans never do anything the easy way.