To comply with the individual mandate and avoid paying a penalty, the Senate health care bill requires individuals to purchase coverage with an actuarial value of at least 60% — a Bronze level plan. Under such a policy, an applicant’s premiums would approximately cover 60% of the health care expenses for an average population; the remaining 40% would be paid by the individual through higher cost sharing.

But the Senate bill deems the rather high-deductible policy somewhat inadequate and pegs its affordability credits to the costs of the Silver plan, leading the Congressional Budget Office (CBO) to focus its premium estimates on Silver policies (with an actuarial value of 70%). Today, the CBO released its premium estimates for the Bronze plan in 2016 (excluding affordability credits). Under the Senate bill, Americans who want to avoid paying the penalty or purchase the cheapest policy would pay, on average, approximately $1,000 less that under current law:

The numbers come with several caveats. The budget office assumed “that the average age, family characteristics, and other factors associated with health care costs of enrollees in Bronze plans would be similar to those of enrollees in Silver plans” and calculated “national averages” that are not necessary representative of “premiums for specific individuals“; those “would differ on the basis of their age, average spending on health care in their area of the country, and the specific plan they chose.”

A 60% actuarial value policy is also rather skimpy (a typical small business usually provides a plan with an actuarial value of 85%). As the budget office explains, the “lower actuarial value would reduce premiums for Bronze plans directly, because the policy would pay for a smaller share of enrollees’ costs for covered services, and indirectly, because enrollees would use slightly fewer or less-expensive services when faced with the higher cost-sharing requirements included in Bronze plans.” Individuals would also face much higher deductibles and co payments. Still, the reformed Bronze policy would have to cover the “essential benefits” specified in the legislation and would likely be more comprehensive than policies available in the existing nongroup marketplace. The affordability credits and out-of-pocket spending caps included in the final reform legislation would also lower costs for Americans between 133%-400% of the federal poverty line.

Last week, I suggested that progressives could salvage the vestiges of the national public health insurance option by including a provision in the final health care bill that provides start-up funds to states that choose to create state-based public options. But adding the provision may not be as easy as it seems. The Center for Policy Analysis reminds me that “Some state and local governments that have attempted to expand health care coverage have been successfully challenged in court under the terms of the Employee Retirement Income Security Act of 1974 (ERISA)” and if the health care bill does not grant an “ERISA waiver” to states that chose to establish a public option, they may find themselves in court.

Congress enacted ERISA in 1974 to allow companies operating across state lines to offer uniform benefit packages. ERISA preempts states from enacting legislation if it is “related to” employee benefit plans. It reserves that right to the federal government. Section 514 of ERISA states that Title V (Administration and Enforcement) and Title IV (Fiduciary Responsibility) of ERISA “shall supersede any and all State laws insofar as they may… relate to any employee benefit plan.”

Hawaii successfully won a preemption battle in 1983 that allowed the state to enact an employer mandate, but single-payer advocates have also challenged the clause. During the House Education and Labor Committee’s mark-up, Rep Dennis Kucinich (D-OH) introduced an amendment that would authorize and require “the Secretary of Labor, in consultation with the Secretary of Health and Human Services” to waive the ERISA pre-emption (Sec. 514) for states that have enacted a state single payer system. The committee adopted the amendment, but it was left out of the final House bill.

It’s unclear if progressives have the votes to pass the state-based public option in the Senate, but if they do, they should include the ERISA waiver to ensure its viability.

“In the absence of government-sponsored health coverage, liberals now want negotiators to waive the anti-trust exemptions for insurance companies –another sticking point for Nelson,” Politico reports. “Oregon Rep. Peter DeFazio told his fellow Democrats on Thursday that it needs to be in the final package to keep insurance companies accountable.”

Progressives have argued that a public option would restore competition to concentrated markets, curtail abusive industry practices and lower health care costs — and they believe they can accomplish the same goals by removing the insurance industry’s anti-trust exemption. But anti-trust experts disagree. They argue that simply eliminating the exemption is not enough; lawmakers must strengthen enforcement mechanisms if they wish to hold insurers accountable.

“At some point in time, the anti-trust exemption probably served as some type of an obstacle and inhibited the federal anti trust agencies from going in and blocking some of the mergers that have led to such a concentrated market,” former anti-trust enforcer David Balto explained in an interview with the Wonk Room. “At this point, there is really no need from the industry’s perspective, for an anti trust exemption. This anti trust exemption permits them to coordinate activities which would be considered collusion in other industries. When you are a monopolist, there is no need to collude.” Today, one in six “metropolitan areas in a 2008 study of more than 300 U.S. markets is [are already] dominated by a single health insurer that controls at least 70% of consumers enrolled in health maintenance organizations or preferred provider organizations.”

Removing the exemption would allow anti-trust enforcers to begin preventing anti-competitive activities and enforcing the new regulations of reform, but lawmakers need to buttress the capabilities of the Department of Justice and Federal Trade Commission if they wish to prevent insurers from entering into collusive arrangements that would undermine any new competition, Balto argues. He proposes several ways to jump start enforcement:

1. Marshal competition and consumer protection enforcement resources to focus on insurers’ anticompetitive, egregious, and deceptive conduct.

2. Create a vigorous health insurance consumer protection enforcement program.

3. Reinvigorate enforcement against anticompetitive conduct.

In light of the compromises progressives have made to advance health care reform, simply removing the anti-trust exemption is too little too late. If progressives want to achieve some of the goals of the public plan — and hold insurers to account — they better give their exemption demands some teeth.

As lawmakers work to reconcile the House and Senate health care bills, health insurance exchanges — regulated online stores for insurance — have become a central sticking point for negotiators trying to iron out the differences in the two health bills and produce a single unified bill before the State of the Union address in early February. In addition to fighting for higher affordability standards and excise tax thresholds, House leaders are reportedly urging their Senate counterparts to establish a national federal exchange that combines the individual and small group markets into one insurance pool and a single exchange.

The House legislation establishes a Health Choices Administration (HCA) that “would have primary responsibility for administering the regulatory and subsidy programs established under the bill.” Conversely, the Senate bill “maintains separate insurance pools for individual and small group, and separate individual and small group Exchanges in each state.” The Senate legislation does allow states to merge the small and individual group markets and create their own basic plan for residents with incomes from 133 to 200% of the federal poverty level.

On Friday, during an event sponsored by the Alliance for Health Reform, Washington & Lee University Professor Timothy Jost urged Democratic negotiators to abandon the Senate’s exchange provisions and adopt the House bill’s more centralized approach. Jost laid out the differences in the two approaches and concluded that a single national exchange would eliminate inefficiencies, reduce insurers’ (and states’) ability to game the system and ensure greater government oversight of the new market place.

Watch a compilation:

Jost also expressed concern that a state-based model would allow conservative states — particularly those that are interested in exempting themselves from reform — to drag their feet on implementing an exchange and hamper the success of the effort.

Jon Kingsdale, Executive Director of the Massachusetts Commonwealth Health Insurance Connector Authority, argued in favor of the Senate provision. Kingsdale emphasized that the exchanges would be primarily responsible for selling insurance coverage to the uninsured and explained that local exchanges could better address the unique needs of a particular region. Kingsdale also criticized the reform legislation for requiring small businesses or individuals participating in the exchange to send their payments to the specific insurers rather than the exchange itself. Kingsdale predicted that this would create a insurmountable administrative burden for small businesses and could keep them out of the exchange.