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.

As Republicans prepare to introduce a series of amendments rationing abortion services out of health care reform, Jessica Arons — Director of the Women’s Health and Rights Program at the Center for American Progress Action Fund — has compiled this very useful comparison of how the proposed reform bills would change current abortion restrictions. (I’ve summarized her report in the table below).

Democrats have argued that health care reform would preserve the status quo. In July, Rep. Lois Capps (D-CA) introduced an amendment in the House Energy and Commerce Committee “that attempted to strike a balance and preserve the status quo on abortion funding”; Sen. Max Baucus (D-MT) has unveiled a bill that closely mirrors Capps’ amendment.

But as Arons points out, reform changes current law by mandating that at least one plan in each market area not offer any abortion services and jeopardizes the abortion coverage of women who transition form employer insurance to plans within the exchange:

	Current Law	House Bill (Capps amendment) & Baucus Bill
Hyde Amendment	Federal dollars can only be used to pay for abortions when the pregnancy threatens life of mother or results from rape or incest.	Nothing changes. Federal dollars can only be used to pay for abortions when the pregnancy threatens life of mother or results from rape or incest. Only private premiums could be used to pay for abortions beyond the Hyde amendment
Medicaid & Abortion	States have the option to use their own money to pay for abortion services beyond what is permitted under Hyde, and 17 states currently do so. The federal money states receive to finance Medicaid cannot be used for these services.	Nothing changes. No public money would be used to pay for abortion services not allowed by the Hyde Amendment.
Private Insurance	87 percent of employment plans currently provide abortion coverage. The federal government subsidizes these plans through an employer tax credit, even if the plans include abortion.	Each plan in the exchange could decide whether to cover abortion services. At least one plan in each market area must offer abortion services and one plan must not. No abortion services—even those allowed by the Hyde Amendment —can be mandated as part of a minimum benefits package.

Read Arons’ full memo here.

Politico is reporting that Sen. Tom Carper (D-DE) is floating a new public option compromise that would “allow states to individually decide whether to create a private-insurance competitor such as a government plan and a nonprofit insurance cooperative, or to open up state-based insurance pools for government workers to every resident.” The option won’t come up during the Senate Finance Committee’s mark-up but may end up in the merged Senate bill or in an amendment offered on the Senate floor.

The idea mirrors Len Nichol’s proposal to establish a series of public options based on already existing state-employer health plans (currently offered in 30 states). The government would offer states start-up funds to establish a program that would compete on a completely level playing field .The public plan would have to be actuarially sound, would not leverage Medicare to force providers to participate or use Medicare payment rates, and would likely adhere to the same rules regarding reserve funds. Patients who are weary of private providers would likely enroll in the public option.

Large progressive states like New York and California will likely embrace this proposal; more conservatives states may wait to see if these public plans save money.

And it’s not clear that they will. State-based public options would enter concentrated markets (already dominated by one or two private insurers) and lack the market clout to negotiate significantly cheaper rates or institute reforms that change the way care is paid for. Existing state-run employer plans (and Medicaid in many states) have already given up on the ‘public’ aspect of their plans and outsourced the work to private insurers. As a result, they have failed to significantly lower health care costs or bring any real change to the market place. In other words, like Carper’s proposal, they are ‘public plans’ in name only.

This compromise may appeal to Blue Dogs or conservative Democrats who aren’t terribly interested in expanding government programs or using the government to lower health care costs; some moderate Republicans may also jump on board. After all, they believe that cost control and delivery reform are best left to a marketplace of private insurers and that’s exactly what Carper does. He creates “public options” that operate like a private plans.