The Hill is reporting that Rep. Mike Ross (D-AR) — who led a group of seven centrist Blue Dogs who objected to a public option that reimbursed providers based on Medicare rates — is floating a proposal to open-up Medicare to Americans under 65, “but at a reimbursement rate much greater than current Medicare rates“:

I — speaking only on behalf of myself — suggested one possible idea could be that instead of creating an entirely new government bureaucracy to administer a public option, Medicare could be offered as a choice to compete alongside private insurers for those Americans eligible to enter the national health insurance exchange, but at a reimbursement rate much greater than current Medicare rates.

The last sentence is key: reimbursing providers who treat the new enrollees at market rates (which are, on average, about 20-30% higher than Medicare rates) satisfies the provider community and conservative politicians from rural states who argue that their hospitals would close if they were reimbursed at Medicare rates. This scheme preserves the integrity of a single national program and takes advantage of Medicare’s administrative efficiencies to lower costs and spearhead delivery reforms. Still, Ross’ solution will likely save less money than a robust public option that uses Medicare-like rates and leverage.

Health reformers have long advocated opening Medicare to select populations. The Congressional Budget Office has concluded that allowing uninsured Americans 62 to 64 to buy into the Medicare program and charging the buy-in population a regular premium plus a 5 percent administrative fee, would not add to long-term Medicare outlays. Dick Gephardt and John Edwards both offered a buy-in option during the 2004 presidential campaign and, in November 2008, Sen. Max Baucus (D-MT) proposed expanding Medicare in the short term and phasing it out once the Exchange became operable (in 2013):

The Baucus plan would make health care coverage immediately available to Americans aged 55 to 64 through a Medicare buy-in. People in this age group face greater risk of illness than their younger counterparts. And while they may require increased access to medical care, they continue to have fewer and fewer affordable insurance options as retiree health care coverage erodes and pre-existing conditions make private insurance prohibitively expensive or impossible to obtain altogether. [...]

To fill this gap in coverage, the Baucus plan would allow individuals aged 55 to 64 to buy Medicare coverage. The option would be available to any individual in this age group who otherwise did not have access to health coverage through a public plan or a group health plan. The benefits would be the same as those available to current Medicare beneficiaries.

This idea is also very popular. Sen. Jay Rockefeller (D-WV) introduced a buy-in amendment for the Baucus bill and, according to a Kaiser Health Poll from April 2009, 79 percent of Americans support a buy-in. A recent Robert Wood Johnson Foundation poll has also concluded that a majority of physicians (58%) also support expanding Medicare eligibility to those between the ages of 55 and 64.

After cutting a deal with Energy and Commerce Committee Chairman Henry Waxman to increase the public option’s reimbursement rates in August, Ross announced last month that “he will vote against health care legislation if it includes a public option.” “I have been skeptical about the public health insurance option from the beginning and used August to get feedback from you, my constituents,” Ross wrote in a newsletter to constituents. “An overwhelming number of you oppose a government-run health insurance option and it is your feedback that has led me to oppose the public option as well.”

This morning, former Majority Leader Bill Frist (R-TN) — who spent a year working as a doctor for the British national health service — argued that President Obama’s health care reform “is not socialized medicine” and predicted that Congress would pass a health care reform bill by December:

So first of all, what the Obama administration is doing is not socialized medicine. You hear a lot of people on the extreme say that socialized medicine is going to come in and control everything. Socialized medicine is where the government owns the hospitals. They own the doctors and they decide how much people are getting paid. And that’s not what’s in these bills.

Watch it:

These “people on the extreme” are members of Frist’s own party. In July, Michael Steele, the chairman of the Republican Party, called Obama’s health plan “socialism.” After the HELP committee passed its health bill, Rep. Louie Gohmert (R-TX) predicted that “one in five people have to die because they went to socialized medicine!.” Rep. Pete Sessions (R-TX) called the public option “socialized medicine” and Rep. Pete King (R-NY) described Obama’s campaign health care plans “socialized medicine.”

Frist has recently characterized Republicans as “party of no,” endorsed the individual mandate, and the Senate Finance Committee’s approach to health care reform. During the CSPAN interview, he even praised certain aspects of the British health care system. “There are some great things about the system as well,” he explained. “The primary care, basic care, those physicians get paid more than primary care physicians here…I think from preventive care is probably better there as well.”

Frist encouraged Congress to invest more dollars in prevention and change the way the government pays for health care services. “If you reimburse not on volume, not on quantity, not on more stuff, but on outcomes, on performance, on value to the patient, what works…if you’re really going to get cost effective health care… you have to come with a value based, and not a volume based system.”

As Democrats move to reconcile the Senate Finance bill with the far more progressive HELP legislation, some are hoping to attract the vote of so-called moderate Sen. Susan Collins (R-ME). This morning, during an appearance on Fox & Friends, Collins laid out her objections to the Senate Finance legislation. “I have a lot of concerns about the Baucus bill,” she began:

- Better affordability measures: “I think it could very well drive up the costs of insurance for middle income families.”

- Opposes the free-rider provision: “I think it unfairly penalizes small businesses when they hire low income workers.”

- Better cost controls: “I don’t think it does enough to reign in costs.”

Watch it:

Some of this is reconcilable. Progressives want to improve the bill’s affordability measures and replace the clunky free-rider provision with a real pay-or-play mandate that would require large employers to offer coverage or pay a fee. To improve affordability standards, policy makers can either lower the value of the benefits packages, exclude more people from the individual mandate, expand subsidies, give the Exchange some real bargaining power, and/or insert a real robust public option. But Collins won’t support a bill with a higher price tag (so the subsidy option is out) and she is unwilling to consider a public plan. Unfortunately, diminishing the value of the benefit packages or leaving more Americans without coverage would only increase costs over the long term and undermine Collin’s third objection. And that should be taken seriously.

The Baucus bill goes a long way towards “reining in costs” and controlling spending (over the long term and the short term). It restructures payments to Medicare Advantage plans (to base payments on plan bids with bonus payments), establishes an independent Medicare Commission to submit proposals for reducing excess Medicare cost growth by targeted amounts, reduces Medicare DSH payments by an amount proportional to the percentage point decrease in the uninsured, reduces payments for preventable hospital readmissions in Medicare, establishes a hospital value-based purchasing program in Medicare to pay hospitals based on performance on quality measures, and invests in all kinds of payment reform models.

Collins says that “reining in costs” should be “one of the primary goals” of health reform, yet she opposes many of these measures. She wants to reign in costs without voting for cost containment policies and Medicare cuts. Rally against the expensive health care system without conceding that the Baucus bill actually moves the system in that direction. To be fair, Collins does call for medical liability reform, which could save some $54 billion over 10 years. The Baucus bill encourages states to develop and test alternatives to the current civil litigation system, and the Senate may include stronger tort reforms in the final bill. But $54 billion isn’t enough to fund health reform and it has done little to reduce the practice of so-called “defensive medicine.” Again, if Collins was interested in reducing costs or making coverage more affordable, she would support the existing measures in the Baucus bill or a robust public option (which according to the CBO, saves twice as much as tort reform).

If Collins is unwilling to recognize or support real cost containment measures, then Democrats are wasting their time wooing the other Senator from Maine. After all, she’s not willing to back policies that support her own rhetoric.