Rumors are circulating that the Senate Health, Education, Labor & Pensions Committee (HELP) will release its bipartisan health care legislation this Friday. Insiders tell the Wonk Room that the proposal will 1) include a robust health insurance exchange that prohibits insurers from denying coverage of preexisting conditions 2) offer subsidies for individuals and small businesses to offset the costs of insurance, 3) invest in prevention and chronic disease management and 4) and may expand eligibility for the Medicaid program.
The fate of the most controversial aspect of health care reform — the public option — remains a mystery, however. Over at The Nation, Lester Feder lays out the principles of a public health option, arguing, quite convincingly, that the public option must be designed in such a way that it 1) reduces health care spending 2) restores competition to health care markets 3) leads the way in improving health quality. In other words, the public option should be designed in such a way that it scores savings with the Congressional Budget Office.
But several Senators have recently endorsed a watered-down version of the public option that builds on existing state employee plans or creates a trigger (a.k.a. “fall-back public option”) that would only establish a public plan if “an arbitrary measure of market concentration were hit in a state” (the White House has also suggested that it is open to such alternatives):
Sen. Olympia Snowe, R-Maine, talked at length Thursday in a private meeting between members and staffers about the possibility of creating a fallback public option that only would kick in several years down the road if insurance companies are not doing their part to bring down healthcare costs and expand coverage, a Republican committee aide said. Snowe has had conversations with Senate Finance ranking member Charles Grassley and Sen. Orrin Hatch, R-Utah, about the proposal. From the Democratic side, Sens. Ron Wyden of Oregon and Thomas Carper of Delaware expressed interest in the idea Thursday, aides said.
State employer pools don’t have a record of lowering health care cost and as Tim Foley notes, “The problem with a trigger like this is the gun has already fired.” In other words, if a health care plan is supposed to break up concentrated health insurance markets and force insurers to negotiate the lowest prices for its beneficiaries, then what are we still waiting for? As a recent Health Care For American NOW report points out, “94 percent of insurance markets in the United States are now highly concentrated,” while premiums “have skyrocketed, increasing more than 87 percent on average over six years”:
If policy makers decide to include a public option, then they should design it in such a way that would enable it lower the nation’s health care spending. A watered-down alternative will undermine the argument of many progressives and ultimately hurt the cause of health care reform.
The debate surrounding a robust public option is one we can win, but first we must be willing to engage in it.