Here’s the post:
HERE’S A DRAFT OF HELP’s (acronym for the Senate Health, Education, Labor, and Pensions Committee) LIKELY PUBLIC PLAN PROPOSAL, as provided by a reliable source. If HELP does go in this direction, it won’t be as liberal as the House, but it will be a strong alternative to the coop plan that is the emerging idea in the Finance Committee, but that progressives hate.
HELP Community Health Insurance Option — June 26, 2009
–HHS-based plan: The community health insurance option would be run by HHS. The government would pay for the first three months of claims as a way to capitalize it; this would be a loan to be repaid over time. For the first two years and longer if necessary, the option would also qualify for “risk corridor protections” which offset or reclaim excessive losses and gains which could result during the start-up period (identical to those in Medicare Part D). Subsequently, its premiums would be set to make it self sufficient. This would make the health insurance option quickly available in all areas of the country.
–Plays by the same rules: The option would be one of the Gateway choices. It would follow the same rules as private plans for defining benefits, protecting consumers, and setting premiums that are fair and based on local costs. The only difference between this option and others is that the Secretary would set the reserve requirements for this plan rather than states.
–Provider payments and participation:
• Negotiated rates within limits: The payment rates paid by the option would be no more than the local average private rates – but could be less. The Secretary would negotiate these rates.
• Input from Advisory Councils: Each State would create a Council of provider and consumers to recommend strategies for quality improvement and affordability. States would share in the savings that result.
• Purely voluntary: Health care providers would have the choice of participating in this plan; there would be no obligation to do so.
Why It Will Make Health Care Affordable:
–Pooled purchasing power: This health insurance option can pool the purchasing power of its enrollees nationwide to leverage lower prices to compete with private plans. Similar negotiation power has been used by states to get drug rebates in Medicaid beyond the statutory minimum. It has been used by large businesses to drive delivery system change. This negotiation would be backed by a ceiling of paying no more than average local rates.
–Flexibility and incentives to innovate: Unlike administered pricing, the negotiation for payment rates gives the Secretary the ability to quickly and aggressively promote payment policies that promote quality and best practices. In addition, the State Advisory Councils would tailor delivery system reform for the plan, with a financial bonus for success.
–Lower administrative overhead: The community health insurance option would not need to raise premiums to support shareholder profits, extensive marketing, and extra risk reserves required by require to protect enrollees from plan insolvency or mismanagement of funds.
Sen. Olympia Snowe is enjoying her “skunk-at-the-picnic” role, still fighting to defend Corporate Health’s profits. Politico reports Snowe, in an interview with AP/Maine:
“[S]aid Monday that a government-run plan that would take effect if the private insurance market fails to deliver affordable coverage could bridge the partisan divide that threatens to derail President Barack Obama’s efforts to reform the system. Snowe said she’s working … to establish that kind of a framework in the bill expected to emerge next month from the Senate Finance Committee.
“Snowe said it would be unfair to include a government-run health insurance option that would take effect immediately. ‘If you establish a public option at the forefront that goes head-to-head and competes with the private health insurance market … the public option will have significant price advantages,’ she said.
“Snowe is seen as a key swing vote on health care. She was the committee’s only Republican who declined to go on record as opposing the public option. Snowe said having a government option as a backup would be an approach “that bridges both sides” and gives private insurers a fair chance to meet the requirements of the new law. ‘I don’t think we can entirely depend on the private insurance market to deliver. They haven’t delivered thus far, and that’s why we’re in the predicament we’re in today,’ she said.”
“Snowe told AP she’s working with Sen. Charles Schumer (D-N.Y.) on the trigger. AP: “Responding to Snowe’s comments, Schumer spokesman Brian Fallon said the Democrat will continue to seek a consensus with Republicans but believes there must be a public option that ‘is available to all Americans from the first day.’”
Darn! A public option will give consumers lower prices. We (meaning those who do the bidding of Corporate Health) can’t have that!
The public option cannot be a “backup.” That will only give Corporate Health time to harden its position and perhaps come up with some short-term maneuvers to “prove” the market system can work. Let them “prove” that from Day 1.
God, do we need Ted Kennedy in there.