Former CBO Director: Public Option Won’t Help Health Care

By Leah Valencia, University of New Mexico- Talk Radio News Service

Former Congressional Budget Office Director and George W. Bush economic adviser Doug Holtz-Eakin said Monday that a public option will not solve the fundamental problems in the U.S. health care system, warning lawmakers that it would ultimately present the same problems as Medicare.

“Public plans are not going to be able to negotiate any more effectively with every local hospital and doctor in a geographic area than private insurers,” Holtz-Eakin said during a conference call hosted by the Galen Institute. “Indeed they might negotiate worse.”

Holtz-Eakin said that the options for a public plan had a remarkable resemblance to Medicare, and if it were to reimburse on the basis of Medicare payment rates, it would only add to the problem.

“Medicare payment policies are one of the problems with the American health care system,” he said. “It is not something we want to spread more broadly throughout the system, it is something we want to move away from.”

Holtz-Eakin noted that the other widely discussed option to run a public plan like a private insurance company would not increase competition because it would be too difficult for the government to politically cut out select hospitals.

“That leads us right to the solution ‘let’s have more competition in the insurance market and that has nothing to do with a public option’,” he said. “It is something we do not need in the debate. We need real reform.”