This afternoon, as the Senate began debate on Sen. Ben Nelson’s (D-NE) amendment to prohibit federal funds from being used for abortions or for plans that include abortion services, Sen. Barbara Boxer (D-CA) drew a parallel to help the amendment’s male co-sponsors better understand its repercussions.

Since Nelson’s measure forces women to purchase special abortion riders, Boxer challenged “the men who have brought us this” to “single out a procedure that’s used by a man or a drug that is used by a man that involves his reproductive health care and say they have to get a special rider”:

There’s nothing in this amendment that says if a man some days wants to buy Viagra, for example, that his pharmaceutical coverage cannot cover it, that he has to buy a rider. I wouldn’t support that. And they shouldn’t support going after a woman using her own private funds for her reproductive health care. Is it fair to say to a man you’re going to have to buy a rider to buy Viagra and this will be public information that could be accessed? No, I don’t support that. I support a man’s privacy, just as i support a woman’s privacy.

Watch it:

When Sen. Orrin Hatch (R-UT) introduced a very similar amendment during the Senate Finance Committee’s mark-up of the health care bill, Sen. Debbie Stabenow (D-MI) called the measure “offensive.” “This is an unprecedented restriction on people who paid for their own health care insurance,” Stabenow said. “The assumption that somehow a woman or family would say, ‘you know some day we may have an unintended pregnancy, so we’ll get a separate rider or maybe my pregnancy is going to have a crisis, many, many crises, and so we’re going to find some other rider.’ In my judgment, I don’t even know how that would work.”

Nelson’s amendment — which is expected to fail on the Senate floor — closely resembles the restrictive Stupak language in the House health care bill. Sens. Hatch, Casey, Brownback, Thune, Enzi, Coburn, Johanns, Vitter, and Barrasso are co-sponsoring the measure.

Policy makers have long complained about the conservative methods of the Congressional Budget Office, criticizing the budget office for failing to score savings from prevention, modernization, and payment reform. As Senate Finance Committee Chairman Max Baucus (D-MT) said during one hearing on health care reform, “We’re not in the old situation where whatever CBO says is God. In my judgment you’re not God. My judgment is that the press — there’s a whole new era and, um, you might be Moses, but not God.”

This afternoon, the Commonwealth Fund and the Center for American Progress Action Fund released a new study that quantifies the savings from the provisions that the CBO and the Center on Medicare and Medicaid Services (CMS) largely ignore.

Economists David Cutler, Karen Davis and Kristof Stremikis go beyond the CBO/CMS methodology by relying on business literature about the inefficiency in the health care sector, experiences of health practitioners, and the real world experiences of Geisinger Health System, Health Partners, Denver Health and others. This more “inclusive use of evidence” estimated higher savings from modernization and payment reform.

In some sense, the analysis is a direct response to the CMS analysis of the House bill. That report argued that the health care industry could not achieve the productivity of other industries because most health care service “tends to be very labor-intensive.” Cutler, Davis, and Stremikis contend that “in past 20 years, every time we changed pay structures, doctors and hospitals have responded enormously to that.” “If this doesn’t work in health care, then health care will be the only industry in the economy where better incentives don’t lead to better performance,” Cutler said on a conference call with reporters.

As a result, the report finds that the Senate bill would reduce the deficit by up to $459 billion over ten years (approximately $300 billion more than CBO estimates) and produce Medicare savings of $576 billion (nearly $200 billion more than CBO estimates for the Senate bill). The annual growth rate “in national health expenditures falls from 6.4 percent absent reform to 6.0 percent under the Senate proposal,” the report concludes:

The CBO, it should be noted, has admitted the limitations of its conservative methodology. Over the summer, CBO chief Doug Elmendorf admitted during a Senate Budget Committee hearing, “we have very little evidence about interlocking changes in the complex health-care system, and I don’t think that our numbers should be the ultimate determinant of the policies that you and your colleagues will vote for and against.” As Robert Reischauer — the CBO head from 1989 to 1995 — put it after one member of Congress wished to know if the CBO’s estimates about President Clinton’s health care reform plan were “in the ballpark,” “Congressman, I believe that we are in the town the ballpark is in. ”

Ezra Klein is reporting that lawmakers may be considering replacing the opt-out public option in the Senate health bill with a provision that would open Medicare to Americans under 65 years of age. “Sources who have been briefed on the negotiations say that Medicare buy-in is attracting the most interest,” Klein reports. “Expanding Medicaid is running into more problems, though there’s some appeal because, unlike increasing subsidies, expanding Medicaid actually saves you money.”

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). More recently, 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 — floated a proposal to open-up Medicare to Americans under 65, “but at a reimbursement rate much greater than current Medicare rates.”

But some point out that expanding Medicare to a younger population is not without its problems. Jacob Hacker predicted in an interview with the Wonk Room, that seniors would oppose opening the program to younger Americans and explained that Medicare was not designed “to provide health security to a younger than 65 population.” “There are a lot of holes in the Medicare program that should be fixed but which aren’t going to be fixed immediately. One of the important reasons to have a separate insurance plan is to make sure you’re providing the kind of good coverage that you know younger Americans need,” Hacker said.

“Ultimately though, we should understand the public health insurance plan idea, and Medicare as being very much interrelated. That over time, we should see this public health insurance plan and Medicare as a way of improving the cost effectiveness and the quality of care delivered to both younger Americans and to those over 65.”

Today’s morning papers indicate that key Senate moderates — Sens. Lincoln, Snowe, and Lieberman– are responding positively to a new public option compromise that would replace Majority Leader Harry Reid’s (D-NV) opt-out proposal with a network of nonprofit insurers administered by the Office of Personnel Management — the entity that runs the Federal Employees Health Benefits Program (FEHBP). From the Washington Post and Politico:

- LIEBERMAN: “If it’s private, and there’s no federal government financial exposure, and the government’s not creating an insurance company, that’s a long way toward what I’ve been concerned about.”

- SNOWE: “A very novel and innovative idea,” because the agency has experience negotiating with insurance companies.

- LINCOLN: “I just think it’s a good idea.”

Unfortunately, policy wonks aren’t nearly as optimistic. Public option godfather Jacob Hacker condemned the proposal as an “abandonment of the public plan idea altogether” and Timothy Stoltzfus Jost called the plan, “The dumbest idea yet.” “Nonprofit health plans are not part of the solution; they are part of the problem….[N]onprofit plans are already the dominant insurers in much of the United States. Of the nations 138 health plans with more than 100,000 medical enrollees, 84 of them, or 64%, are nonprofit,” he wrote.

While the details of the proposal are still unclear (nonprofits would compete in state-based exchanges with other private plans), its cost-saving capability rests in the power of the OPM to enroll nonprofits that can deliver quality care efficiently — with little administrative overhead. Here is what we know:

Q: Will we still see a public option in the Senate health care bill?
A: It’s unlikely that the current opt-out public option can attract 60 votes. The opt-out “is no longer being talked about,” Sen. Ben Nelson (D-NE) told Politico. Lawmakers are now considering establishing an FEHBP-like exchange of nonprofit insurers, administered by OPM.

Q: Will the OPM compromise lower costs?
A: It all depends on how the OPM acts. If it’s a prudent purchaser (and only picks the most efficient nonprofits), then it would save some money. However the OPM has not been successful in controlling costs within the FEHBP.

Q: Will the OPM compromise accomplish the goals of public option?
A: It may accomplish some of the goals of the public plan. The nonprofits are private insurers administered by a government entity that would compete on a level playing field with other private plans in state-based Exchanges. While competition may lower costs, this compromise will not introduce new delivery and payment reforms into the market.

Q: Will the OPM compromise still save a couple hundred billion dollars?
A: We don’t know yet. The Congressional Budget Office has yet to score the proposal. But so far, the only thing that saved anywhere in the range of a hundred billion dollars, was the Medicare +5 public option that the House considered but ultimately rejected. The CBO found that the current opt-out public option would save $3 billion over 10 years.

Q: What are the Democrats getting in return?
A: We don’t know yet. Over at The Treatment, Jonathan Cohn explains how progressives can use “their concessions on the public option to demand improvements elsewhere in the bill.” One idea is to extend prudent purchasing into the state-based exchanges.

Moderates are still considering other public option proposals. On Saturday, Snowe met with President Obama on Saturday to discuss the Snowe’s trigger public option compromise.