SAN DIEGO – The AHIP Institute 2009 general session was titled “Promoting Better Value for Our Health Care Dollar,” but arguments for and against the public plan option in the healthcare reform debate became the major topic.

Healthcare reform should include choice, and one of the choices should be a public option that is an improvement on Medicaid, provides value and is the benchmark for competition, said Jacob Hacker, professor of Political Science at the University of California at Berkeley.

Hacker said that three elements have to be at the heart of any solution:
•    shared responsibility through a new exchange;
•    shared risk through a new exchange; and
•    personal responsibility.

“I’m really hoping we can debate on how we achieve these broad goals,” he said.
Hacker envisions a national Medicare-like plan that places a greater emphasis on value, which includes transparency and comparative effectiveness.

A true variety of plans will offer choice and competition, he said. “Choice has to be meaningfully different,” Hacker said.

“I don’t see a compelling need for a public plan,” said Gail Wilensky, economist and senior fellow at Project HOPE. Citing Medicare’s flaws, including its fee-for-service payment structure, lack of flexibility around policy and payment, and siloed infrastructure, she said that the first hurdle would be how to finance expanding to universal coverage.

“If we have a public plan, it will dominate and use its powers to set prices,” she said.
Len Nichols, director of the Health Policy Program for the New America Foundation, argued that paralysis would only worsen the crisis.

“If we do nothing else, we will get price controls in seven years,” Nichols said.
A public plan would address the loss of trust in private insurance by many Americans and can succeed if properly established, said Nichols. That said, he stressed that the country would be better served if Congress fashioned a bipartisan plan.

“At the end of the day, we are talking about 45 million – maybe 52 million now – costing $1.5 trillion over a decade,” he said. “We need to change incentives enough to pay for this.”