Several reports are describing Sen. Maria Cantwell’s (D-WA) ‘Basic Health Plan’ amendment — which would give states the option to provide health care coverage to people with incomes between 133% and 200% of the federal poverty line (about 75% of the uninsured) — as a “quasi public option.”
States would use their purchasing power to negotiate for more affordable coverage options, improve efficiencies, and even lower the health care costs within the Exchange (by shifting lower income and disproportionately sicker individuals into the Basic Health Plan), but they would have to contract with private insurers. And there ain’t nothing public about private insurers. From the amendment:
Under this amendment, the federal government would provide funds to participating states in order to allow such states to provide affordable health care coverage through private health care systems under contract….State administrations would seek to contract with managed care systems, or with systems that offer as many of the attributes of manged care as are feasible in the local care market. A minimum medical loss ratio of 85 percent would be required of all participating plans….State administrators should seek participation by multiple health plans to allow enrollees a choice between two or more plans, whenever possible. A participating health care system can be a licensed health maintenance organization, a licensed health insurer, or a network of health care providers established to offer basic Health Plan Services.
In other words, the federal government would provide states with funds to establish Basic Health Plans for lower income Americans that would be completely run by private insurers. As Ezra Klein explains, and Cantwell freely admits during their interview, the proposal is “entirely orthogonal to the public option debate. It doesn’t create competition or transparency or experimentation.”
And remember, states have to chose to do this, and if they do, they could only offer negotiated rates to a small relatively small group of people. At the end of the day, this plan, like any state-based proposal, would lack the market clout to lower overall health care spending across the board, reform health care delivery, or hold private health insurers accountable.