Another Public Option (but Probably Not for You)

[one...two...tree 2,762]

Senator Ron Wyden of Oregon has said that many of his constituents were astonished to learn that a public option, even if it were passed, would not be available to them.

By David M. Herszenhorn

If you are one of the roughly 160 million Americans who have health insurance through an employer-sponsored plan, this post is not necessarily for you. Feel free to click and move on.

On the other hand, if you are one of the more than 30 million uninsured American citizens who might benefit from the creation of a government-run insurance program in 2013, or if you just can't get enough of the loudest shouting match in the Great Health Care Debate of 2009, feast your eyes on this: House Democratic leaders are exploring yet another potential compromise in their effort to create a government-run insurance plan, or public option, to compete with private insurers.

The debate among Democrats over the public option has mainly focused on two proposals: a "robust" plan whereby payments to doctors, hospitals and other providers would be tied to Medicare's rates; and an alternate plan that would require the government insurance program to negotiate its own payment rates.

The robust plan would save the government money, because the payment rates (roughly, Medicare rates plus an extra 5 percent for doctors) would be lower than negotiated rates would be. With negotiated rates, the public plan would likely pay fees roughly equivalent to those paid by private insurance plans.

But House Democrats are now exploring a third approach: the public plan would start out with negotiated rates but would have a fallback provision or a "trigger" that would link the plan's rates to Medicare if it turned out the plan was not saving enough money using negotiated rates.

The House speaker, Nancy Pelosi of California, has submitted three versions of the public option to the Congressional Budget Office for cost analysis, and she is awaiting the results.

Ms. Pelosi, at a news conference on Thursday, made a forceful case for the public option. She criticized private insurers, citing new statistics showing that rates for private coverage are likely to rise by 10 percent next year, and she cited poll numbers showing public support for the public option. "The American people are so smart," Ms. Pelosi said, noting that the legislation would require nearly all Americans to obtain insurance.

"They know if they are mandated to buy health insurance, they don't want to have to buy it from the same old insurance companies who have not served them well," Ms. Pelosi added. "We are saying rather than force them to buy health insurance from the insurance industry, let us give them the freedom to do that if they wish or to have a public option. The more you talk mandate, the higher the support for a public option becomes."

A number of Senate Democrats have said that they would never support a public plan that used rates tied to Medicare's, and it is unclear if they would go along even with the compromise proposal.

The robust public option would be a main source of revenue to help pay for the House version of the health care legislation. It would generate about $110 billion in savings over 10 years. House leaders have been exploring other ways to generate a similar amount of savings if they settle on a public option using negotiated payment rates, which would only result in about $25 billion in savings over 10 years.

As Sheryl Stolberg reported in Thursday's Times, the back-and-forth over the public option has become the loudest political argument in the health care debate, with many people viewing it as a proxy for a larger argument over President Obama's vision for the country.

Liberal Democrats support the public option, and centrist Democrats are divided. Republicans overwhelmingly oppose the public option, which they say will eventually drive private insurers out of business and lead to a fully government-run health care system.

But the public option is not necessarily as crucial to the overall health care legislation as the volume level of the political debate might suggest. The vast majority of the proposed changes to the health care system could be accomplished with or without a government-run plan — a point that Mr. Obama stressed in his speech to Congress in September.

The public option would not be available to the majority of Americans — most of the roughly 160 million people who already have health insurance through an employer. It is also not viewed as a viable alternative to existing government programs like Medicaid and Medicare.

If it were approved, the public plan would be an additional choice among the many competing private insurance plans available for purchase through new government marketplaces, or exchanges. Some versions of the legislation call for a national exchange, while others would establish state exchanges.

Moderate-income individuals and families would be given subsidies to help buy insurance, and they could use those subsidies either for the public option or for private plans. Many of the poorest people to gain insurance through the proposed legislation would simply be added to the Medicaid rolls.

The public option would presumably be cheaper than the private plans, because it would not have to pay private-sector executive salaries or generate profit for shareholders. This is why Republicans say it would have an unfair advantage over private plans. They also say that if the public plan started losing money, the government would have no choice but to spend tax dollars to prop it up.

The Senate Health, Education, Labor, and Pensions Committee included a public plan with negotiated rates in its version of the health care bill. The Senate Finance Committee bill did not include a public option.

Compromise proposals are under consideration in the Senate, as well, including a plan developed by Senator Thomas R. Carper, Democrat of Delaware, that would let individual states decide whether or not to create a public plan.

Senator Olympia J. Snowe of Maine, the only Republican to support the Senate Finance Committee bill, has floated the idea of a public plan that could be "triggered" in states where not enough people obtain affordable insurance coverage.

Democratic aides say that Senate leaders working with the White House to meld the two bills are inclined to leave the public option out and to let supporters propose amendments to add it during floor debate.

At a rowdy caucus lunch on Thursday, Senate Democrats expressed deep divisions over the issue, with liberals arguing loudly in favor of a public plan and centrists arguing against it.

Some supporters of the public option have warned that many people do not realize that the government-run plan generally will not be available as an alternative to existing employer-sponsored insurance.

Senator Ron Wyden, Democrat of Oregon, who has strongly advocated offering more choices to Americans who now have employer-sponsored insurance, said that when he met with constituents over the summer at local high schools, many were stunned to learn that the public option would not be available to most of them. "They nearly fell out of the bleachers," Mr. Wyden said.

http://prescriptions.blogs.nytimes.com/200...ll-not-for-you/

[Spoom 8]

Can't we just have single-payer? It would make things a hell of a lot simpler and cost people less in the long run.

(By the way, though I don't really care about the continued viability of private insurers, HR 676 would hire their displaced workers first.)

Edited October 17, 2009 by Spoom