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  • Senator Schumer's Magical Plan for Health Care Compromise

    US Senator Charles Schumer (D-NY)

    According to the May 5th New York Times, Senator Charles Schumer (D-NY) has proposed a health care reform “compromise” on the creation of a new public plan to compete with private health insurance. No doubt Schumer is trying to convince moderates that they should ignore Rep. Jan Schakowsky (D-IL) frank admissions that a public plan is just the first step of an unprincipled strategy to achieve government run health care.

    Schumer’s compromise would require that the public plan and private plans would abide by the same rules and regulations. But even the NYT identifies some huge holes in his claim. Would the public plan be subject to state premium taxes, like private health plans, or state insurance laws, or solvency requirements with the private plans in states with which it is competing? Could the public plan be allowed to become insolvent? Or will it become another candidate for an eternal Congressional bail out? We have even more questions than the NYT does:

    • Will public plan officials be subject to the same state and federal tort laws?
    • How about the same accounting standards as private companies?
    • Could they be sued for breach of contracts?
    • Will they have to negotiate rates and benefits like private plans, set up provider networks, and set prices in the market, just like private plans do today? Market prices? (No special advantages, remember)
    • Will the officers of the public plan be able to reject doctors or medical professionals who do not meet quality standards like private plans can do today, or will they be forced to take any willing provider?
    • Will the benefit setting of the public plan be transparent and benefits packages be completely transparent, defining clearly what is and is not covered? No confusion on these points, like that which afflicts Medicare beneficiaries today.
    • Would the public plan officers have budgets to market their products, just like private plans? Would those marketing costs be subsidized by the taxpayer or paid out of public plan premiums? ( Otherwise, looks like those awful administrative costs would be incurred by the taxpayers).

    Of course, Senator Schumer and his colleagues invite us to ponder a problem in elemental logic. If the public plan and the private plans are really going to abide by the exact same rules, what is the point of a public plan in the first place?

    Of course, the public health plan would be a wholly owned subsidiary of Congress Inc. That means that it would be a political institution, just like every other government sponsored enterprise, including Fannie Mae and Freddie Mac. It will be ground zero for special interest lobbying – by doctors, hospitals, drug companies, and insurers, as well as every special interest to the left of Pearl Jam, on a scale unprecedented in health care history.

    If Fannie and Freddie, and AIG and the Automakers, and the Big Banks and whatever else is in line for a big bailout at taxpayer expense is “too big to fail”, guess what would be the congressional response to a shortfall in the income of a newly minted, congressionally created public health plan with millions of enrollees? There’s no guess work here. Unless you believe in Unicorns.

    Posted in Obamacare [slideshow_deploy]

    13 Responses to Senator Schumer's Magical Plan for Health Care Compromise

    1. Spiritof76, New Hamp says:

      Stupidity of the affordable insurance schemes misses the point about accessible health care. Insurance does not mean ability to receive health care.

      Get the government out of health care business. Otherwise, it is going to be a disaster.

    2. jacksmith says:

      Swine flu (A-H1N1) and Healthcare In America

      Well my fellow Americans, and people of the World. That was yet another very close potential catastrophe. Especially for those of us that live in America with our busted, greed driven, private for profit healthcare system. What ever you do World. Don’t copy our current healthcare system.

      If that virus (A-H1N1) had emerged just a few months earlier our busted healthcare system in America would have collapsed. Just like our economy almost did. And hundreds of thousands more Americans, if not millions would have needlessly lost their lives. As hospital ER’s became choked with the sick, and dying.

      All on top of the hundreds of thousands of Americans who needlessly lose their lives in America each year from a rush to profit by the private for profit healthcare industry. Rich, middle class, and poor a like. Insured, and uninsured. Men Women, Children, and Babies.

      This was yet another big WAKE-UP! call for America, and for our Government. It’s time for Congress to end the debate. And stop dancing around the issues of how they can continue to try and justify protecting the private for profit healthcare industry, and the private for profit healthcare insurance industry. These industries are killing hundreds of thousands of Americans every year in America, and endangering our National security.

      “the health-care system is, first and foremost, for the American people—not the companies that profit from it.” (Tom Daschle | NEWSWEEK)

      IT’S OVER! The Private for profit healthcare experiment in America is dead. It FAILED! And it was a DISASTER!


      Essentially HR676 (enhanced, and expanded medicare for all). Just like every other CIVILIZED! country in the developed World has. There is no other way to truly fix or reform our current disastrous healthcare delivery system. NONE!

      Congress, fix our healthcare crisis while you still have time.

      President Obama, VP Biden, the Obama administration and the rest of his advisors, along with Speaker Pelosi and Harry Reid are doing an excellent job of protecting you. And also an excellent job of representing you and the best interest of the World. But it’s time for the rest of Congress to get on board.

      To those of you who keep standing up and fighting for single-payer universal healthcare for all. YOU! are Americas true HEROES! And I am proud of you. :-) Don’t let up.

      I will have more to say about this VERY! unusual virus (A-H1N1), and flu in general, later. There are some things you really need to know and think about… All of you.

      Till then, God Bless And Keep You All

      Jack Smith — Working Class

    3. Alex says:

      These sort of plans do help a lot of people these days but there are still some drawbacks in this public plans. They are actually meant for some rich people only..

    4. DaveinHackensack says:

      Good points, but what's your solution? A Democratic plan, however flawed, will likely get more political traction than a Republican non-plan. Conservatives may need to offer an alternative better than the status quo, or else be tagged as the party of "no".

    5. Steven, Houston says:

      Hell yes. I do hope that the public plan is a back-door way of establishing single-payer universal health care. Capitalism is an entirely appropriate system for the creation of cars, computers, and toasters. You don't die if you can't pay for them. Capitalism is a monstrous way to distribute health care. You DO die (or suffer unncessarily) if you can't pay. Health care should be socialized. Period.

      If it were up to me, I would immediately expropriate all private health care companies without compensation and turn all private health care employees into government workers. Issue health care cards to all American citizens and begin rationing care based on need instead of the current monstrosity of the ability to pay. Of course, you need to dramatically increase the pool of nurses and general practicioners, so I would create a massive system of training and scholarships to double (or triple) the number of doctors, nurses, and community health care centers across the country.

      I realize that this is not a realistic option in our current political culture, but the back-door method being described has wonderful prospects for success. If I were Obama, I would get the most left-wing plan possible…wait until Franken is seated in six months, and have a plan that the 50 most liberal Senate Democrats will support, plus Biden as a tie-breaker. Then let the inefficiencies of the "free" market health care companies dig their own graves. Then finally, finally, the people of the United States can enjoy a basic right enjoyed by the rest of the modern industrialized world for generations.

    6. RJ Shelton says:

      Insurance companies have overhead costs of up 31 percent. Medicare says overhead for them is just 4 percent. Insurance compnies that administer medicare plans have overhead costs of 14 percent, a lot of which is profit for the company at the expense of the beneficiary. Claiming that administration costs of a public plan will be overwhelming compared to private ones is dishonest fear-mongering. If the insurance companies were really offering a good service, support for a public plan would not be so strong.

    7. Dave Ofiara, Saratog says:


      One very obvious fact missing from the debate. No country that has switched from capitalist insurance company wealth (health?)care systems to public universal health care has ever gone back to privatized expensive exclusionary non-systems like the USA has.

      A few questions:

      1. Why don't public universal health care systems all over the world have the cost/benefit problems that tyrannize the USA?

      2. What benefit do insurance companies add to the health care process?

      3. If privatized health insurance is so damn efficient, innovative, and good why are the private insurance companies mortified about a little competition from a public plan. It seems that they want a monopoly, all the money they can grab and no competition. No regulations, and no effective competition. Let's see and have their beloved marketplace decide it.

      4. Why are Democrats pre-negotiating their proposals with Republicans before a proposal is formulated to make it to the floor of the Senate. The Republican party has been rejected by the people. Nobody listens to them. They are politically bankrupt nobodys. The Democrats have an open shot at the goalposts. Go for the goal, Democrats you've got the votes. Don't worry Democrats you won't get one Republican vote on this no matter how much you wimp out ahead of time for no particular reason.

      Present the bill you really would like to have and go for it. A little courage and intelligence will go a long way. We've worked hard to get this far. Don't drop the ball, now!

    8. Rick, Buffalo, NY says:

      Those of you wishing for a socialized plan should think through what you're asking for. A single, government run plan will have to control costs. If you think you're going to have the same level of access to meds, procedures, etc., think again. If you think you're going to get the same quality of care, guess again. Canada has a severe shortage of primary care physicians- a government run plan, complete with cost controls and mandated reimbursement prices, will shutter hospitals and have individuals re-think a career in medicine. Private companies aren't "mortified" by a public competitor. They know it wouldn't be a level playing field- think Fan and Fred. The government won't allow a public plan to financially fail. Taxpayers will be responsible for keeping such an entity afloat. It's not an accident that Canada is looking for ways to privatize their system in an effort to cut costs and increase access. Waiting lines are not a health care option. 25% of Canadians do not have access to their system, as a PCP is required to enter the system (and pediatricians do not count as PCP's. They are considered specialists, so if Mom or Dad don't have a doc, neither does Junior). Over 40% of British cancer patients die before they see an oncologist. Palliative care plays a much larger role in socialized medicine countries than it does here, and those nations have little, if any, medical innovation. A socialized system here would be a disaster- not just for US citizens, but the citizens of Canada and other nations who come here to have procedures done in a timely manner (or have you missed the busloads of Canadians coming here for surgeries and specialists?). Be careful what you wish for- you might get it.

    9. Pingback: The Greenroom » Forum Archive » Obama’s campaign to takeover healthcare is on

    10. Sandy, IL says:

      Rick, you are absolutely correct! That's the reality of the proposed situation. I know one individual in Canada that has waited a year just to get tubes in their child's ear. That's reality. Geert Wilder said "That's the biggest mistake you can make" I have heard people from Canada state the same thing. It's going to be rationed health care and anyone that thinks different is living in a dream world. Plus if this goes through, just how many people do you think that presently has private insurance will choose to continue when they are already paying for public insurance through their taxes. Once the insurance companies are out of business, we have a huge problem on our hands. There needs to be a debate that includes people living in countries with nationalized health care, before anything is decided. This is a HUGE MISTAKE!

    11. Mike Severn MD says:

      Health Care how much will we pay for Goverment Health Care, we will be paying more taxes on climate change about $2,978.00 a year, on cap & trade, bailouts $$$$ and SS# medcair. How much more and when will it stop?

    12. Pingback: Patterico’s Pontifications » Obama’s campaign to takeover healthcare is on

    13. domino says:

      My ancestors that settled NY would have shuddered at a man like Schumer, Don't let him lead you down the garden path because at the end of the path is healthcare turned ugly. Listen to your fellow Americans.

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