POLITICS: Arizona's Public Option

Written by Randal Serr on . Posted in Politics

Randal Serr

Randal Serr

Critics of health care reform, specifically of the public option, often point fingers at “socialized” countries and complain that they don’t want the government running their lives, both of which are logically unsound. Besides the fact that these “socialized” countries have better health care results for less money, opponents of real reform still refuse to accept that a public option is a viable solution. We have heard a lot about how we don’t want to be Canada, but we have failed to look at a public option in the United States that has been successful for decades. It’s not the universal plan initiated in liberal Massachusetts either. It is a public option plan in the conservative state of Arizona.

In 1985, the Arizona State Legislature created what is called the Healthcare Group of Arizona. It is a state-sponsored program that provides guaranteed health care to uninsured businesses (with at least 2 employees), meaning that no one can be turned down for health care based on any medical condition. Differing from other private health care plans, the Healthcare Group reports to the Arizona Legislature. The small businesses can either pay the premiums or offer the plan directly to their employees. It offers various benefit plan options to fit many needs, lifestyles and income. And yes, it covers dental and vision benefits. One of the plans offered even provides the benefit of a cafeteria service.

In short, it’s a great health care option. When the public option started in Arizona there were about 10,000 people enrolled in the plan. Total enrollment as of 2007 was over 45,000 due to word of mouth from satisfied users. The plan has reduced the number of uninsured persons in the state, since small businesses and their employees are often the most likely to lack insurance. The group’s market-based approach has prompted other private insurers to be more innovative and price-competitive as well as seen with price reductions. In other words, it “keeps them honest.”

This is not to say the plan doesn’t have its challenges. Shortly after the plan was passed by Arizona Legislators, premiums had to be raised because funding for the program was running short. There is also risk because the Healthcare Group has to meet goals of enrollment growth in order to keep price stability. Nevertheless, the group’s premiums are now less than half those of private insurers. Based on Arizona’s success story, logic would follow that a public option at the federal level is not doomed to failure and increasing debt.

It appears as though the Arizona plan is successful and that — as in the past — if a federal plan presents challenges, the necessary adjustments will be made by legislators. President Obama has repeated over and over that the public option will pay for itself in about a decade. With legislative changes, the Arizona public option has become self-sustaining without subsidies from the government and their budget is now operating in the black. Sounds like a pretty good deal to me.

Randal Serr is a liberal political columnist for Rhombus.

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