by: Chris Bowers
Fri Oct 30, 2009 at 15:40
Last night in Quick Hits, art3 alerted the Open Left community to the ugly repercussions of the defeat of the Medicare +5% public option. Now, it appears quite possible that even if the negotiated rates public option passes as a part of the final health care bill, it will not cost any less than private health insurance plans. From the CBO analysis of the House bill (page six, PDF):
Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.
That estimate of enrollment reflects CBO's assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that "adverse selection" on the public plan's premiums would be only partially offset by the "risk adjustment" procedures that would apply to all plans operating in the exchanges.)
Ouch. That is pretty awful. In plain English, it means that the public health insurance option won't cost less than private health insurance options because, on average, the people purchasing it will be sicker and less well-off. So, even though it will save on administrative costs, its risk pool will force it to charge rates very similar, and possibly even higher, than private insurance companies.
After such a momentum defeat, at this point the public option campaign is just about getting a legislative architecture in place that will allow the public option to be improved later on with only 50 votes in the Senate. Unfortunately, however, any such improvement will be dicey, given that we apparently lack simple majorities for a stronger public option in both the House and Senate. So, in addition to still struggling just to get the public option in place, we are going to have to struggle down the road to get a better group of people elected to both the House and the Senate.
In this bleak environment, yesterday the House Tri-Caucus (Congressional Black Caucs, Congressional Hispanic Caucus, Asian Pacific American Caucus) and the Congressional Progressive Caucus all met with President Obama to voice their frustration. The White House simply described the meeting as productive:
It was a productive meeting that lasted for about an hour. The President congratulated the members on working so hard to get a meaningful reform bill put together in the House.
In a post-meeting interview with Democracy Now!, Progressive Caucus co-chair Raul Grijalva used much stronger language:
basically brought out that now that we're in this stage of having to deal with this negotiated rates that came out of the House, and something much worse coming out of the Senate, on a public option, that we felt-set some parameters of what we felt very strongly about, that the bill still needed to be strengthened; that there had to be cost controls on the private insurance companies, especially with negotiated rates, because they get to set the rates and we have to chase those rates with taxpayers' dollar; and no triggers and no opt-outs, that we feel those are detrimental to the public interest and certainly to constituencies that have lacked the ability to access healthcare in this country for so many years.
That is just for starters, as Grijalva also criticized the White House for catering to Olympia Snowe, and not being a strong enough advocate of the public option. Grijalva also indicated that he would not work to defeat the bill, given that he criticized Senators who have threatened to do the same:
We're facing the most historic vote that any of us are going to take in our careers. And for procedural reasons or for other reasons, to threaten to filibuster, to threaten to scuttle, whether it is Senator Bayh, Senator Snowe, Senator Lieberman, I think they're missing their opportunity with history, and I think the White House and leadership shouldn't allow them to be absent in this fight.
This may be a tough bill to swallow, but with language like that it sure doesn't sound like Grijalva is looking to round-up Progressives to vote against the bill anymore.
This bill may very well provide a lot more people with coverage, we may well still get some sort of public option passed, and the Progressive Caucus does appear to have increased its influence. However, the cost of premiums will continue to rise beyond what are already unacceptable levels, and even without the filibuster we apparently still do not have a good enough Congress to pass transformative legislation. It is a hard pill to swallow, and a very frustrating day.
http://www.openleft.com/diary/15760/a-major-setback-on-the-public-option
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