Out From What Options Will States Opt?

More details are emerging on the “opt-out” public option. For one thing, my question of who does the opting has been answered — to opt out you need a bill based by both houses of the state legislature and signed by the governor. That means the vast majority of people will likely have the opportunity to join the public option.

On the other hand, the version of the public option that people will get to join would be a pretty limited one. Igor Volsky explains:

The comprise was developed by Sen. Chuck Schumer (D-NY), who converted Sen. Tom Carper’s (D-DE) original state-based opt-in proposal into a national opt-out option, and is far more conservative than the robust public option being considered in the House.

If the option is modeled on the provision in the HELP Committee’s bill, the plan would only save about $25 billion over 10 years, without significantly lowering health insurance premiums. It would likely lack Medicare’s market clout or leverage to significantly lower health care costs, but would still represent a not-for-profit alternative that can begin spearheading critical delivery system reforms.

Since both Senate bills establish state and regional based exchanges in lieu of a single national structure, it’s likely that the compromise in the merged Senate bill will establish 50 different options, all controlled by the Secretary of Health and Human Services. The public plan would have to attract a network of providers, charge premiums “in an amount sufficient to cover expected costs,” and meet all solvency and reserve fund requirements.

It’s been clear for a while that the support just isn’t there in the Senate for a more robust Medicare-linked public option. But this kind of pared-back public option is a lot worse than the meatier version. One reason folks like Ezra Klein and myself were saying over the summer than the public option fight wasn’t the be-all and end-all of health reform was precisely the awareness that any public option that passes the Senate would almost certainly have to be this kind of “level playing field” public option that only improves things marginally.


The best thing about the level playing field public option, however, is that it keeps hope alive. It might be able to spearhead some crucial delivery reforms. States that opted-out initially might opt back in. And with the public option in place, it could be altered over time in a more Medicare-ish direction as it becomes clear that that would be a way of helping to deal with the various deficit issues that will come to a head sometime after this recession ends.