Guest columnist: We need national non-profit public option administered by government

After President Barack Obama managed to pass the Affordable Care Act (ACA, aka Obamacare), millions of insureds finally received meaningful coverage, which allowed them to be treated for their preexisting conditions, which would have been excluded prior to the ACA.

Obama had wanted the ACA exchange to include a non-profit public option. That didn't happen. The political will did not exist. One can speculate about the lawmakers' motives. But I believe it was all about money, profits, lobbyists, and lawmakers willing to sell their power and position for campaign donations.

We are now at a critical, unsustainable stage where crushing insurance premiums are causing insureds to face impossible choices of paying premiums, a house payment, putting food on the table, or going without insurance at all. Something needs to change.

I suggest a national non-profit public option, administered by the government. Non-profit medical insurance can work, and, in fact, it did work for the Blue Cross and Blue Shield plans for about 60 years, from 1929 to the mid 1990s.

However, even then, prospective individual insureds (not with a group) could be waived (not covered) for pre-existing conditions (those conditions they acquired before being insured by the Blues).

Right now, we do have non-profit government-administered health insurance, called Medicare. The administration costs vary from about 2% to 7%.

But I'm not suggesting Medicare for all. About 60% of the American population have employer provided medical insurance. Taking away this very attractive benefit, which employees and union members may like very much, would put a huge tax burden on the public at large. I don't think it's a stretch to state that no American wants to pay the level of taxes of those in the Scandinavian countries. (Denmark's rate of taxation for the average Dane is 45%.) Nor do I think Americans want to wait, possibly for months, for non-emergency procedures. Our Canadian neighbors experience long wait times for procedures, as reported in the Fraser Institute by Mackenzie Moir and Bacchus Barua in their piece of Dec. 24, 2024, titled "Canada's median health-care wait time hits 30 weeks — longest ever recorded."

I personally met a Canadian woman at the Mayo Clinic in Rochester, Minnesota, who had traveled there with her husband, who had been diagnosed with prostate cancer, because he was told he couldn't be operated on for nine months. The cancer-stricken husband wasn't happy with waiting for months while his cancer advanced, so they went across the border with their inheritance and spent it for him to get treated.

A healthcare insurer being on the stock exchange is the first clue that their leadership's primary concern is torn between making a profit for the shareholders and themselves, and paying out claims for their insureds. In fact, of course, paying out claims diminishes company and shareholder profits.

In the 1970s, I worked for a physician-sponsored non-profit Blue Shield insurance company with no such conflict, Pierce County Medical Bureau, in Tacoma, Washington. Out of every premium dollar received, 87%-90% was returned in claims paid out. Our CEO and President, Laurence Evoy, was probably well compensated, as were all employees. But I can assure you he didn't make millions, even one; probably far less than half a million.

Nationally, we now have a patchwork of medical insurance companies, some non-profit, most for-profit. In order to be on the ACA exchange, they must return 80% of premiums to benefit their insureds. But multi millions are being paid to CEOs in salaries and bonuses, and billions have been paid to purchase share buy-backs. Their exotic accounting apparently still allows them to legally adhere to the 80/20 rule. My simple observation is: This very big money enriches CEOs and shareholders. It isn't being used to expand coverage, pay claims, and lower premiums? And lawmakers have enabled and condoned this giant loophole?

Veronica Riccobene states in an article, "All in all, the country's largest health insurers have invested over $120 billion into repurchasing their own shares since the passage of the Affordable Care Act in 2010. These include UnitedHealth Group; Cigna; Elevance Health, the parent company of Anthem Blue Cross Blue Shield; and CVS Health, which acquired Aetna in 2018."

So, I propose a national non-profit public option administered by the government, which already has a good track record of keeping Medicare's administrative costs low. Citizens could purchase and/or transfer to and from an employer-sponsored plan. In order to be successful, non-profits need to have a great number of insureds (including young healthy people) to spread the risk; they must have extremely good data; they must have experts and actuaries to interpret this data, and enough fiscal backing.

I'm not suggesting this national non-profit medical insurance supplant existing companies on the ACA exchange. I'm suggesting the non-profit public option be added to the exchange. Let them all compete.

In addition to insurance subscribers, it should be remembered that doctors, nurses, hospitals, physical therapists, pharmacists, and all ancillary participants in delivering health care are stakeholders. Without these players being adequately compensated, the public will eventually suffer. Without sufficient funding, there is inadequate staffing, a lack of equipment, and too few hospital beds, which all result in reduced quality of patient care and delays.

We can assume our lawmakers, the same ones who passed the Big Beautiful Bill that favors the rich and powerful, won't be chomping at the bit to add a national non-profit public option to the ACA exchange. We need to persuade them it's in their best interests to look out for our best interests.

Andrea Veach, of Louisville, can be emailed at [email protected]