Isn't any PO supposed to be self sustaining? (So why would a state opt out?)

[Kurt_and_Hunter]

The individual mandate requires subsidies. Money from the government.

But a Public Insurance Option is--as discussed throughout 2009--self-sustaining, fully funded by premiums.

If a government entity gives somebody money to get the public plan that is the same as giving them money to get a private plan.

So what are the costs associated with a public option that any state would want to avoid? It's not like medicaid or something. There's no governmental contribution. (Except start-up funding of some sort.)

What am I missing?

(In reference to comments in about ten different threads about whether certain states could afford to be part of a national PO)

[WonderGrunion]

1. Political grandstanding and corruption would cause most the opposition

Some people can't be made to save money.

[Canuckistanian]

2. I thought this was a national plan

How could states "not afford" a PO when it doesn't even involve their budgets?

[TomCADem]

4. Exactly - Look at Mark Sanford of South Carolina - He Ended Up Accepting The Stimulus

After grandstanding a bit to burnish his presidential ambitions before the media discovered his hottie down in Argentina.

[Scarsdale Vibe]

3. The point is that no state will actually opt-out.

It's a purely political compromise that will have absolutely zero effect on the final workings of health care reform. The likelihood of a health care reform bill with a robust public option by the end of the year is quickly approaching 100%. Hopefully, the legislative victory on health care reform will segue into a push for the Congress to pass climate change/energy legislation before the midterms grind everything to a halt.

[DrToast]

5. For Freedom!

[Doctor_J]

24. right! One day you're joining the Public Option, the next you're praying to Karl Marx

These slopes are verrrrrrrry slippery

[phleshdef]

6. If such a compromise gets a strong PO created and established, so be it.

I guarantee that if Republican states start opting out and people see the benefits other states are getting from it, those states won't be Republican for very long.

[LiberalFighter]

7. Anyone foolish enough to opt out are fools of course.

It won't be just benefits to the people with their personal insurance but also to their taxes. The health care provided to local and state employees are paid for by taxpayers. How will they explain that to the residents of the state when they don't reduce taxes or increase them knowing that expenditures could be reduced under the plan?

[CTyankee]

8. There appears to be no foolishness great enough for these diehards.

Monumental and deliberate stupidity is the hallmark of these people.

[Doctor_J]

23. Exactly. Let the idealogues opt out

Sorry Texas, OK, SC, etc. Vote your loony reps/governors out next time.

[geek tragedy]

9. Death panels and schoolhouse abortions.

Other than that, expect every state except maybe Mississippi and Alabama to sign up.

[Phx_Dem]

10. Because it's a Democratic (party) plan.

[Overseas]

11. To protect the governors' corporate funding.

The governors who do so, to stir up more opposition to the public option, probably get a dash of corporate funding just for doing that.

Just by showing their resistance to "government interference" of any kind, the Greedy Obstructionist Party probably gets thanks contributions.

These "no thanks on the stimulus" type moves probably net some big contributions for being obstructionist, even if the governors in question later march around with big checks in their own name when the funds arrive, like Bobby Jindal did.

[lumberjack_jeff]

12. Look at it from a different point of view.

Fast forward to 2014. My family makes $50,000 year, and I don't get insurance through my employer.

I knock on the door of my state exchange. They tell me that I can get bronze, silver or gold coverage from two private insurers and the public option.
Insurance "A" costs $650, $850 and $1100 /month for the respective coverage levels
Insurance "B" costs $630, $830 and $1000 /month
The public option plan costs $450, $550 and $850 / month.

The public option looks really attractive. "Not so fast", the exchange administrator says, "based on your income, the government will subsidize all your costs over $3600/year". Since none of the plans are cheaper than $300/month, the incentive provided to the consumer is to buy the most expensive plan that the subsidy rules will allow - regardless of relative value.

The way the subsidies are set up, few consumers will select the public plan. It will be relatively easy for red state governors to eliminate plans which no one chooses.

The biggest problem with all the plans being considered is the back-asswards subsidy. The subsidy ought to be a sliding scale with the lowest income participants (say up to $30,000 year) getting a voucher for 100% of the cheapest silver plan, and going down from there.

[Kurt_and_Hunter]

13. But where does their standing come from?

A State can cancel a state program.

A State is permitted to cancel medicaid because there is a state contribution and it is partially state administered. In that instance the state would be canceling THEIR state government participation, not forbidding an individual state resident from participating in any federal poverty program.


Why question is what is the nexus of state interest that would even begin to make residents' participation in a national program a state decision? Is there a state money or administrative mandate in the PO proposals?

[lumberjack_jeff]

15. "Standing" isn't required. Pretexts and political ability are all that is required.

The pretext will be a press conference of conservative doctors complaining that the public plan is impoverishing them. The political ability will come from the fact that few consumers have chosen the public plan.

There are two ways out of this trap;
a) rework the subsidies
b) open the exchanges to the largest number of businesses as quickly as possible. Businesses are not affected by the perverse incentives provided by the subsidy.

[Kurt_and_Hunter]

16. Without some nexus I am having Constitutional issues

It seems to me that the individual's relationship with the Federal government is primary.

I'm sure they can find some way to draft such a thing to skirt such issues, but it offends my core sensibilities.

[lumberjack_jeff]

17. I'm not sure why.

The state exchange administrator is under the supervision of the state insurance commissioner. The states have the authority to exclude any insurer.

And from the perspective of state regulators, the public option is simply another insurance company.

[Kurt_and_Hunter]

18. Gottcha. Thanks.

[sandnsea]

20. The house plan is a sliding scale

I think the HELP plan is too.

And the public option has been estimated by the CBO to cost 10% less.

The subsidies are the most important thing we can be talking about. That and the age ratio because if we still end up with $1000 premiums for 60 year olds, we've still got problems.

[lumberjack_jeff]

21. But the sliding scale is backwards.

Instead of the government paying up to "x", they will subsidize anything over "x".

For the self-insured the subsidies give no incentive to choose a cost-effective plan.

[sandnsea]

25. Here's a comparison

between the House plan and Baucus plan. Everybody should be able to choose whatever plan they want and the subsidy should be the same percentage. This is why there should be plans that don't offer maternity care, for instance, because some of us know we simply will not need it. Perhaps it should only be available to people who cannot reproduce, but if it would be cheaper, it should be made available. Anybody should be able to choose higher coverage and pay more, even if they're subsidized. I think the House plan does that. The Baucus plan sure doesn't seem to.

http://www.cbpp.org/cms/index.cfm?fa=view&id=2922

[Aramchek]

14. because that state is filled with jackasses?

[karynnj]

19. Ideology

If they are strongly against the Government providing service favoring private enterprise they would reject it - just as the republicans at the federal level do.

[Doctor_J]

22. Because psychos like Inhofe would rather their constiuents die than be saved by Obama

Pretty simple, actually.