Obama Administration Makes Clear Its Support for Public Health Insurance Plan

President Obama's new Health and Human Services Secretary, Kathleen Sebelius, testified before Congress at a May 6, 2009 hearing on health reform held by the House Ways and Means Committee. Her testimony made clear that the Obama administration does not believe needed health reform can be achieved strictly through the private health insurance market and wants to give people the choice of a public health insurance plan.

In her opening statement Sebelius clearly expressed the Administration's support for a public health insurance plan:

"I share the President's belief that reform must guarantee choice of doctors and health plans, including a choice between a public and private plan option. No American should have to give up a doctor they trust or a health plan they like, and comprehensive reform shouldn't force any American who are satisfied with their coverage to make changes. But covering every American, access to the high quality health care, is so important." [Emphasis added]

Watch to her full opening statement here [1].

When Representative John B. Larson [2] (D-CT) asked Sebelius if the current private health insurance market does an adequate job of providing affordable health insurance, she made it clear that she believes insurance companies are interfering too much with doctors' treatment decisions:

"I think working on a strategy moving forward, getting rid of some of the rules that allow insurers make health decisions instead of providers. I know there's a lot of talk about not having bureaucrats make health decisions, but I think it's equally important not to have private insurance companies make health decisions, overruling protocol recommended by health providers. And part of health reform is to change those underlying rules, to have major insurance reform along with this effort." [Emphasis added]

Watch to her response here [3].

Doctors seem to agree. A survey of doctors [4] by the Medical Society of the State of New York found that of the 1,200 physicians surveyed:

The Committee Chairman, Representative Charles B. Rangel [5] (D-NY) asked directly about the Administrations support of a public health insurance plan:

"On the question of why do you and the President think that a public plan is so important in providing quality care at lower competitive prices?"

Sebelius responded that competition is needed in many insurance markets where there are very few private plan offerings:

"What I'm a believer in, and certainly the President is a believer in, is that competition often is a very healthy component of any market situation. And I think that competition helps promote innovation, it helps promote best practices and also can help to lower costs. So in the design of a health insurance exchange, which is really what we are talking about and what the President discusses, a choice of a variety of options is often critical. In many parts of the country, including in my home state of Kansas, there are lots of areas in the state where there aren't choices of private carriers for many citizens." [Emphasis added]

Sebelius went on to assert that a level playing field can be created between public and private health insurance plans:

"The underlying issues are what are the rules, what are the actuarial issues going into the design of the plan and is there a level playing field? And I can assure you Mr. Chairman and some who have voiced opposition or at least at best skepticism about a public plan option, that the President is committed to, and I am committed to, the fact that the design needs to level the playing field. And it's on two fronts. First, a public plan option should not undercut the private market; tilt the playing in one direction. The private market, on the other hand, shouldn't be able to cherry pick the least costly patients. So getting rid of some of the pre-existing medical condition barriers that allow a skewed market place I think is important. But having an option for individuals; having a choice for the Americans who don't currently have coverage; and having competition to drive the best practices, the best cost efficiencies, the best protocol, I think can be very positive in the long run." [Emphasis added]

Watch to her response here [6].

Representative Wally Herger [7] (R-CA) challenged Sebelius' belief that a level playing can be achieved. She responded with examples of areas where such a level playing currently exists and a renewed assertion that it is possible and that a public health insurance option is important to improving the nation's health care system:

"I think Congressman the examples of that, again, are in place across the country. Thirty of the states have state employee health plans where there is a public option for state employees side-by-side with a variety private options, created largely to give those state employees in a state like mine, in Kansas, a choice, because much of our state only had one private provider and we felt giving employees a choice for themselves and their families, a competitive choice, was important. A number of states have constructed their CHIP programs, the health insurance plans for children, in exactly the same way, where there is a side-by-side option of a private provider and a public provider. What I can assure you is that it can be done as a level playing field. It's about the rules that are established in the beginning and that the President and I are committed to working with members on this Committee and members in Congress to make sure that the playing field is level. And as I said the private insurers currently have, in fact, I would say a tilted playing field in way too many areas where cherry picking on the market is a strategy to make a profit. So that the ability to underwrite individual's medical conditions, to either make insurance unaffordable or unavailable, is a current private market strategy. I think that that measure doesn't work well in a health insurance exchange any more than a measure, which would give government huge advantages and huge subsidies, doesn't work well. So I think if the rules are the same, so individuals who have lower income, who are not insured, have a subsidy benefit as they come into the health exchange, and can choose between a public and public plan option with the same kind of rules, I think it can work as a very important competitive situation where it will help drive...public and private will be competing, not on underlying price or unfair government subsidies, but really on practice and protocol, on lowering overhead costs, on lowering administrative costs and driving benefits to their incoming enrollees." [Emphasis added]

Watch to her response here [8].

So don't let Congress rip out the heart of Obama's health care plan! Learn more about why a public health insurance option [9] is vital if want to provide quality, affordable health care for everyone.

And then stand with President Obama and Dr. Howard Dean to demand the choice of public health insurance [10] by signing the petition today!