Vol. 4    No. 22
OCTOBER 29, 2009 Archives

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    The national health care reform debate has started to come to a close in Washington, D.C. with the Senate and
the House starting to report out their final versions of the bill, which they will begin to debate and vote on in the
coming week. After each chamber of Congress passes their versions of the bill, a joint conference committee
will meet to hash out the differences in the versions so that a single bill can be presented — and passed — by the
Senate and the House before it arrives on President Obama’s desk for his signature hopefully before Christmas.
During all of these deliberations, four versions of the public option — a government-run health insurance program
similar to Medicare — have been part of the debate. In the Senate, there have been two basic versions
discussed.
    The opt-out version would establish a nationwide public option. But it would allow states to opt out of the
program. While this opt-out version would allow states to opt out because they feel they have a better and more
comprehensive public health plan, it would also allow states to opt out and offer no alternative to private health
insurance programs. This could create a hodge podge of insurance environments that could possible affect
where businesses locate their offices and plants. Health insurance would still be driving hiring and business
location decisions.
    The trigger option would not institute a public option immediately. Instead, it would create a ‘statistical trigger’
whereby a public option would be instituted if private insurance carriers did not reign in their premium increases.
For 2010, some private insurance carriers are talking about a nine percent increase or more during a period
where we have experienced almost a period of deflation where prices have declined or remained steady. The
impact of the trigger option would depend on how the trigger was defined. A vague trigger could prove to be no
trigger at all and be just an illusion of reform that never becomes a reality. A strong, clearly defined trigger would
kick-in with a public option when a certain level of increase in premiums is hit by the insurance industry. For
some, this just means a delay in the public option for a few years, during which time the private insurance
companies would be able to jack up their rates even more before an inevitable public option kicks in because
the private insurance companies would not be able to regulate themselves in an unfettered market. The trigger
mechanism could also become a floor for rate increases and an unintended mechanism for the private insurance
carriers to collude with the blessing of the government. Lobbying in subsequent years could raise the trigger with
a uniform, unfettered rise in health insurance rates.
    The robust public option would have a national health insurance plan that would reimburse physicians and
others at the reimbursement rate of Medicare plus an additional five percent, the so-called ‘Medicare Plus Five’
option. It appears that this would have the least administrative cost because it would rely upon Medicare’s cost
pricing structure. I have to admit that this version is the most appealing to me.
    The final option is the negotiated public option. While this would have a national public option impact, the
impact would vary by regions. The federal government would negotiate the fees of physicians and other groups
through negotiations with regional physicians groups and others. While it may be good to have some variation
according to region to allow for local circumstances, it could also end up having higher costs for those groups
with the better set of negotiators and lobbyists. And it sounds as if this version could end up inflating the
administrative costs of the public option and could even make it more expensive that current private insurance
plans.
    Currently, the Senate is proposing the ‘opt out’ public option although Sen. Joe Lieberman (I-Conn.) has said he
will filibuster any health care reform bill that includes the public option. It’s hard to imagine that this is the same
Joe Lieberman who was the Democratic vice presidential candidate in 2000. At least 60 percent of the American
people want a public option with health care reform. Lieberman has clearly lost his Democratic roots. The Senate
could end up with the ‘trigger’ public option.
    On the House side, it was announced on Friday that the house was going with the ‘negotiated’ public option
after intense behind-the-scenes debate between the forces pushing the ‘negotiated’ public option and the ‘robust’
public option. Our own Tammy Baldwin who was originally for a single payer system with no private insurance
companies was pushing for the ‘robust’ option, an option I prefer of the four remaining options.
It is my fear that a watered-down public option is going to be passed and made into law. This version of the public
option would be so weak and expensive that it would end up being a failure and discarded. And its failure would
be used to discredit the public option to the extent that it would not be a viable option in the United States for
another generation. In the meanwhile, real health care reform would be a figment of our imaginations.
    If it comes down to a bad choice amongst worse choices, I would opt for a ‘clearly defined in cement trigger’
public option than a ‘watered-down, doomed for failure’ public option. But clearly, these are not the options at all
that I want to see come into law. A strong, robust public option is the only way to get a handle on health insurance
costs now and into the future.

ACADEMIC ARCHITECT
Kaleem Caire and the
Next Generation Foundation
Reflections/Jonathan Gramling
                           Robust or trigger?