"Death Spiral" - Its a terrifying name. Its also the de-facto description of what the public option will undergo if it is "optional" because optional will mean not enough money will be devoted to it to avoid the "Death Spiral"

It starts with a nice, but misleading idea: "All other things being equal, public, nonprofit insurance can be cheaper than for-profit insurance"

Right? No - wrong. Because PUBLIC insurance HAS to be fairer and serve the public good and not the god of money.

The private insurance we all are hoping to replace is very profitable and expensive, because they deny care, right?

The catch is in that "if all other things are equal". The problem that eventually kills public option is that they wont, they can't be equal in profitability..

They will be extremely unequal. Any public option has to be fair to the sick. The for profit insurers don't. Not even Obama can EVER force a COMPANY to lose money.  They have to make money so they avoid insuring many. That willingness to insure the sick makes the public option the insurance of last resort for many, inherently a money loser. It will drive up its losses or it will have to raise its premiums
(This is one of several links documenting these so-called "Death Spirals")
If the risk pool gets sicker. And the higher the premiums go, the fewer people, healthy or sick can afford it.

Their only public option will become Medicaid loans for the indigent. (Which people are eligible for ONLY AFTER THEY OWN OR MAKE VIRTUALLY NOTHING.)

There's more...

I am going to attempt to make a list of the ways that the opponents of affordable healthcare are spinning the situation so they can keep healthcare costs expanding. They are already too high and they are going to get higher and higher, relative to most of our income, unless we take steps now to change that.

1.) Anything thats OPTIONal doesn't save enough money to make healthcare affordable. Why, because the two systems have to exist side by side, and as the cost of the armies of bureaucrats, is huge, and since also the cost of paying for healthcare for the sick is so expensive, its basically a choice, which one do we choose. If we keep both, we simply could not save any money, in fact, two options side by side means administrative costs rise, they might hit 40%

thats what happened in MA. net result, healthcare is LESS AFFORDABLE

2.) Schumer's proposal to make 'public option' "revenue neutral" means that the public insurance will soon cost MORE than private insurance. It will be better, but unaffordable to almost everybody. Sick people might find a way to pay, because they will need a plan that, for example, covers more, but the more of them who join, the higher the premiums will have to go thanks to Schumer's constraint. This is called "adverse selection", and the result will be prices getting higher and higher, soon the well wont be able to afford it. It will die and the right will say that universal healthcare "failed"

3.) Medicaid is not Medicare!!! BEWARE!Medicaid is a LOAN - for the indigent, and its only available once you have literally been rendered penniless by debt. Then it adds even more debt. At 9% interest. Medicaid will NOT HELP MAKE HEALTHCARE AFFORDABLE IN THE WAY MOST OF US THINK IT WILL. Expanding Medicaid will reduce insurers costs, because right now hospitals pass on those costs to others. The poor will have to pay them directly. No more writeoffs or free riders. THEY WILL OFTEN NEVER BE ABLE TO REPAY AND THE DEBT WILL MAKE THEM A NEW UNDERCLASS, LIKE ILLEGAL IMMIGRANTS.

There's more...

The list is very long and the "public option" PR campaign is clearly extremely well organized and well funded, but you can't put lipstick on a pig, and the healthcare industry-centric and unacceptably vague, probably unaffordable "public option" exposes Americans to far too much risk. In this economic climate, we should be following the path we KNOW can lead to a successful, healthy nation, joining the civilized nations in the 21st century.

Misconceptions:

1.) The primary vehicle for channeling health care to low income people, Medicaid, is a means tested loan program, it is not a grant or an insurance plan, per se. the huge bills incurred by the poor are supposed to be repaid.

That said, Medicaid has saved hundreds of thousands of lives of people who would not have been able to get health care any other way. For example, people with AIDS. Typically, it steps in after they have lost jobs and spent most of their pre-illness assets on medical care. (I think they are allowed to have some assets, the equivalent of around one months rent in urban areas)

The interest rate for repayment on Medicaid's loans is I think 9%. people often have to sign over assets like homes, inheritances, and lawsuit settlements to repay their medical debt to Medicaid. People are trying to imply that a non-single payer public option would somehow offer free money to the poor for insurance. Also, I think they are downplaying by a huge margin the probable expense of the insurance plan, given what such comprehensive plans cost nationally.

2.) I think it is extremely imprudent to NOT rush into a decision on healthcare without considering all of the options, and to date, discussion on single payer seems to have been suppressed, sometimes brutally. Any salesman who says "buy now or its gone" is trying to hide something. I strongly recommend that all of you watch the film Sicko, (I think you can find it online through Google) which shows how incredibly different the universal healthcare systems in a number of countries are from the propaganda, It will make Americans nostalgic for the simpler times of the past when healthcare was not this black cloud hovering over our nation. People in other countries still live like that, they still have fun. Life goes on for them.

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The Finance Committee is meeting again next Tuesday. The options they have been discussing so far are anemic. They can't save enough to make healthcare affordable and won't - don't even seem to try, to address the huge number of uninsured or especially the uninsurable people (everyone with chronic health issues, the 20% of all uninsured Americans - the people who the commercial insurers don't want to insure for any price.)

Their care wont EVER be "profitable". Obama is implying that he may help them, but his proposals don't begin to save enough money to do it. Certainly it wouldn't be possible without subsidies that, because of adverse selection would become too expensive. If Obama's publc option needed to be revenue neutral, premiums would rise as sick people joined up, subsidies if they existed, would not be funded adequately. There would be bitterness because of the unaffordable expense of the premiums of the public option. Lets not fool ourselves, there is no safety net. Obama's public option doesn't provide one. In this economy it isn't what we need. What we need is single payer, universal health care for all. Politically, this nation is in a state of crisis because of the unaffordability of basic healthcare. It is the single largest cause of bankruptcies and homelessness. There is no safety net. Just look at the states failure to fund a Medicaid for single adults, in 41 states you can be penniless with NO income and unless you have kids, they wont help you with one penny. That means that adults dont get care - people are desperate. We can't let them waste another decade. In ten years, the money wont be there. Realistically, Obama's public option can't help most of us. Its rearranging deck chairs on the Titanic, his own economic advisors have admitted that they cant have a mandate BECAUSE they wont be able to make healthcare affordable. Subsidies would probably be limited to the poorest of us only- Obama's proposals to date conspicuously preserve the existing system which ties insurance to jobs, keeping wages down, reducing innovation in our economy by making it hard to start new businesses, and by all accounts preventing those near or over 40 from getting jobs that they are otherwise qualified for because of the higher cost of insuring them.

Obama says "nobody will be turned away IF they can afford the premiums". That is a big "if" because if the public option requires guaranteed issue, the public option will be a magnet for people with high medical costs. The name of this effect is adverse selection, and its been a serious problem from the beginning with Obama's proposals. If the public option looks like the high risk pools.. as insurer of last resort its premiums will rise.. We wont be able to afford Obama's untested experimental procedure because of adverse selection

Please follow the link below to the phone numbers for the Finance Committee. Dont let them sacrifice affordable healthcare and subject millions of Americans to Obama's risky untested medical procedure..Its designed to fail, its not going to be affordable, and our rising costs won't stop. He throws away a historic opportunity and exposes us to much more risk and costs than we can afford - probably for another decade - Our lives and futures will be sacrificed on the altar of their lobbyists and their status quo.

There's more...

Obama appears to be entertaining the idea of mandated healthcare for normal families, but only if those who are quoted high prices for insurance (usually the sick or their family members) are exempted from having to purchase insurance, "because it is too expensive".

This will address his goal of making healthcare more efficient, but it will leave the basic problems unaddressed, keeping the insurance industry profitable.

Ideas being floated are requiring businesses to foot the bill, (making older employees more expensive to hire and replacing employees with investments in technology-driven solutions more attractive) and increasing capital gains taxes on investment income.

The Obama administration has been holding a series of forums with hospital and insurance company executives and handpicked community members to guide the process of healthcare reform.

Q: What is Obama doing to address the problem of adverse selection?

A: This is why Obama is considering a mandate that requires healthy people to buy insurance. The original idea of a public option is a good one, but there is a huge risk that only the sickest 20% of people, people who need prescription drugs or care for ongoing chronic health conditions like hypertension, cancer or diabetes, would seek out the government alternative, given their difficulty in obtaining private insurance. This would make the government program much more expensive. By requiring everybody who was quoted a price under some line to buy insurance, or face a fine, Obama would slightly increase the size of the pool of healthy people buying insurance, the theory is that at least some of them, perhaps those with spouses or children with chronic illness, would purchase the government plan, enlarging the pool of healthy enrollees somewhat. This might lower the rate signficantly without forcing the government to pay more than a few billion dollars more to insure them because their premiums might exceed expenditures, especially if their chronically ill family members were not that sick.

Ultimately, though, the problem of cost is a significant one. How Obama will avoid the issue is a big question. He seems to be adamant against the government negotiating prices down as a bloc, and wedded to the idea of jobs being connected to healthcare access (perhaps to keep wages down)

Stay tuned as reality sets in for the Obama administration.

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