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Public option will help curb health care costs

Back in the good old days, Gov. Nelson Rockefeller quickly embraced the new health care program for the poor called Medicaid.

Medicaid was an afterthought to the new federally run program for seniors called Medicare. That was in 1965. He estimated Medicaid's statewide cost at $45 million a year. Critics said it would be $100 million a year.

The next year, Rockefeller adjusted his guess to $80 million.

What has happened since to Medicaid should be -- but isn't -- a fearsome object lesson to President Obama and others looking for sweet compromise in today's health care debate.

Medicaid was a program run by 50 sovereign states overseen by the federal government, not run by the federal government and its civil service, as is Medicare under Social Security.

Lacking strong central control, the 50 separate state Medicaid programs got grasped at by wheeler-dealers, health care unions and crooks and its costs quickly swam out beyond the surf.

In addition, folks just plain choose to ignore what always happens to prices when availability to health care dramatically increases. Instead of going down when more grocery stores come into a market, they shoot up, because the strongest of all emotional factors -- the will to live -- is factored in.

In 2007, Medicaid cost $40 billion in New York State, according to data supplied by State Comptroller Thomas DiNapoli. That included $20 billion in federal aid, plus the state and local shares. The cost had been growing at about 9 percent a year, close to three times the rate of inflation.

The Rockefeller Institute estimates the cost will grow to $49 billion next year. It isn't just inflation. Every player in the health care field has taken a piece out of Medicaid in New York: Nursing homes, hospitals, emergency rooms, rehabilitation clinics, medical suppliers, the drug industry, billing companies, visiting nurses and their referral services, their consultants, their lobbyists and the enormous commercial back shops run by all of the above.

Every governor, every New York member of the House and Senate has proposed or voted for a little add-on over the past four decades, and eligibility just growed [sic].

Some sort of public or private health insurance now covers all but 2.7 million New Yorkers, according to the Urban Institute. But somewhere between 40 percent and 50 percent of that number are eligible for insurance but don't apply, despite outreach programs to sign up people. I suspect the ratio of non-appliers is much higher.

No two state Medicaid programs are alike. But New York State gets more than 15 percent of the federal outlays for Medicaid despite having just 7 percent of the population.

No one in his right mind wants to destroy the private health insurance business. At the same time the New York experience with Medicaid argues loudly for a strong public option as a part of whatever Obama and Congress do to alter coverage this year.

Without strong federal oversight, and without uniform standards, Medicaid became the target for every cherry-picking gambit one could imagine.

Expanded federal eligibility for insurance with only "guidelines" for thousands of private companies will only drive up costs and give opportunists another field day with our money. There doesn't seem to be any way to curb costs and crooks without having a public option run by the federal civil service, perhaps the Social Security Administration, in the mix. Some phony "cooperative" among existing brokers is just a fig leaf for a renewal of genteel racketeering.

Eligibility for the public option could be limited to the newly unemployed, and those making too much money to get Medicaid.

Despite the president's waffling, House Speaker Nancy Pelosi, D-Calif., remains resolute. "A public option will be in the bill that passes the House," she said Thursday.

e-mail: dturner@buffnews.com

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