Last week, while we were all at Netroots Nation, 128 House Democrats introduced a new public option bill that could reduce the deficit by $68 billion from 2014 to 2020 and offer premiums that “would be 5 to 7 percent lower than other private plans available within the exchange.” Emma Sandoe, who was gracious enough to do a post on this (including a very snazzy table), had this to say about the effort:

Realistically, this chances of this public option bill passing this Congress, who is exhausted from the last public option fight and in full midterm mode, are slim. This hasn’t deflated Woolsey who said, “This will be there for the next Congress.” Whether or not this proposal goes anywhere legislatively, it reminds more progressive voters and members of the party that the public option has not been forgotten. States have already begun showing support for public run insurance systems, this support from the federal government can work to galvanize the effort.

Democrats in progressive districts want to use the bill to turn out the base in November, and that’s a good thing. The public option is one of the most popular and controversial elements of health care reform and if structured correctly from a policy perspective, it could actually go a long way towards lowering health care costs and injecting some competition into insurance markets. We should welcome this move, but we should also urge Democrats to go further and spend equal energy on ensuring that the existing parts of the law, particularly the exchanges within which the public option will operate, are well implemented. After all, various parts of the health industry are busy influencing the implementation process and Democrats in Congress should too.

HCAN issued a report just last week about how the insurance industry is already spending millions of dollars to water down the medical loss ratio regulations and other sectors are undoubtedly working to craft their own regulatory exemptions. There are several progressive-based implementation efforts underway, but with the exception of a few dedicated health care wonks — Sen. Jay Rockefeller (D-WV) among them — few Democrats have spent time publicly countering the well-orchestrated industry lobby or pressuring the HHS Secretary and the other relevant agencies to issue regulations in the consumers’ interest.

But this fight is just as essential as the public option and Democrats should be holding Congressional hearings, working closely with their state insurance departments and legislatures, and doing all they can to ensure that the bill is properly implemented. If they don’t, we know that the industry will determine the effectiveness of reform, and in many respects, the future of the party.

Senate Majority Leader Harry Reid (D-NV) is telling The Hill that health care reform will improve the Democrats’ chances in November, pointing to polls which show that the more people are asked about repealing health care reform the less they like it:

“All the polls around the country, including Nevada, indicate that when people are presented with ‘Do you want to do away with giving 25,000 small businesses in Nevada a 3 percent discount on the healthcare?’ they all say no,” Reid explained in an interview with David Brody of the Christian Broadcasting Network. ” ‘Do you want to have Medicare extended for 19 years like we did it?’ They say yes. You don’t want to repeal that. ‘Do you want to open the doughnut hole again?’ They say no, so the more people know about healthcare, the better they like it.”

Reid is right to argue that Americans/small businesses don’t want the government to take away the tangible immediate benefits — checks to seniors in the doughnut hole, children on their parents’ coverage, tax credits — but I’m not so sure that they’re as confident in what’s coming in 2014. Republicans have caught on to this reality, taken credit for reform’s most popular and immediate provisions, and have moved on to shape the public’s perception towards the new reporting requirements and the exchanges, releasing reports that aim to discredit the new benefits before they’re even rolled out.

I suspect that businesses will be affected by reform in different ways. Behind the scenes, they’re already working with the relevant federal agencies to ensure that any new requirements don’t add unnecessary burdens. Nevertheless, the political debate isn’t about how best to implement reform for small businesses — it’s about whether we should have reform at all. As my colleague Lelsey Russell notes, that is an easier argument to win.

Today, she’s released a new report demonstrating what would happen to small businesses and their employees if reform was completely repealed:

- Small businesses will pay 55 percent more in health care costs for their workers over the next 10 years.

- 128,000 jobs that could have been saved will be lost over the next decade as health care costs continue to escalate.

- Small business employees will lose up to $309 billion in wages over the next 10 years as a consequence of health insurance’s increasing cost.

Projected benefits may not be as convincing as the tangible and immediate provisions, but so long as Republicans are painting the future in dark colors, it’s helpful to remind voters of the alternative. Read the full report HERE.

All insurers are required to set aside a certain portion of premiums for future claims that have not yet occurred and/or not yet reported over the expected term of the policy. Back in April I wondered if insurers were shifting some of their earnings into reserves in order to inflate their medical loss ratios — which measures the percentage of premiums that are actually spent on medical care — and keep their reported profits artificially low (remember, they keep insisting that insurer profit makes up just 4% of national health care spending).

Well last week, Consumers Union released a report suggesting that at least some nonprofit insurers are “setting aside unnecessarily large surpluses even as some of them continue to raise premiums”:

The report released Thursday by the Consumers Union, the nonprofit publisher of Consumer Reports, found that seven of 10 Blue Cross Blue Shield affiliates examined had amassed surpluses that are more than three times the level regulators deemed necessary for them to remain solvent.

At the close of 2009, for instance, Blue Cross Blue Shield of Arizona had a surplus of $717 million, more than seven times the regulatory minimum. That same year, the company raised premiums for its individual market customers between 8.8 and 18.4 percent.

Similarly, Regence Blue Cross Blue Shield of Oregon had about 3.6 times the regulatory minimum surplus, yet it raised rates on some individual policies an average of 25.3 percent in April 2009 and 16 percent in April of this year, the study found.

As Ken Terry observes, “What all of this says is that insurers, whether for-profit or not-for-profit, will try to maximize their margins in any way they can. And when they’re sitting on a pile of cash, they’re going to invest it. It would be nice if they would rebate some of their surpluses to policyholders, as some auto insurance companies do. But, short of a federal mandate, that’s unlikely to happen.”

Insurers are required to report their reserves to state insurance commissioners, “who review them to gauge the financial soundness of each insurer.” It’s up to these commissioners to ensure that the issuer isn’t overstating reserves and understating its earnings. This report probably suggests that at least some commissioners are asleep at that wheel.