U.S. Weighs Government Health Plan to Compete With Private Insurers

By Donna Smith
May 7, 2009

U.S. Health and Human Services Secretary Kathleen Sebelius Wednesday said a proposed government health insurance plan backed by President Barack Obama would compete with private insurers rather than lead to a socialized system as Republicans claim.

In her first appearance before a congressional panel since taking office, Sebelius fielded questions about a new government health plan that would help cover the estimated 46 million uninsured Americans.

"Dismantling the private market ... is not something the president supports. He supports moving forward and filling the gap, not disrupting the entire market," Sebelius told the House Ways and Means Committee.

Republican and private insurers argue that a government-run plan would drive insurance companies out of business. Sebelius said it would inject competition in the market, keep costs low and help cover the uninsured.

Obama has not put forward a specific plan and is leaving it to the Democratic-controlled Congress to write the legislation.

Ways and Means Chairman Charles Rangel said how the plan they proposed would operate and what benefits it would offer depended largely on costs.

Sebelius said several states offer public insurance plans to their employees, taking on the underlying risk but contracting with private insurers to operate the plan.

Obama wants an overhaul of the $2.5 trillion U.S. healthcare industry passed by the end of the year. The ambitious undertaking has become more urgent amid soaring health costs and rising U.S. unemployment that is leaving many workers without their employer-sponsored health insurance.

"The costs of the current system are unacceptable and unsustainable," Sebelius told the committee.

SEVERE DISPARITIES
Sebelius said two new reports released Wednesday underscored the urgency of the reform effort.

One showed "severe and pervasive" disparity of care between population groups with minorities generally receiving poorer care, she said.

About 40 percent of patients do not get the care recommended for them, she said. Also many obese adults and children are never told to exercise and eat healthy foods.

Patient safety at hospitals has declined, she said. "Patients come to the hospital expecting to get well and unfortunately too many of them are acquiring potentially fatal infections. It has become one of the top ten leading causes of death in the United States."

Fighting these infections cost about $20 billion a year, Sebelius said.

Lawmakers want the overhaul to improve treatment by basing payments to doctors and hospitals on the quality of care given, not just the number of procedures and treatments.

(Editing by Alan Elsner)