16 June 2009

Lost in the Shuffle

There was a lot going on yesterday, what with the HELP markup and Obama's photo op at the AMA and all that, so I didn't get a chance to comment on Senator Jay Rockefeller's Consumer Choice Health Plan, a compromise or "weak" version of the public plan option, and I'd hate to let it pass unmarked:

Some details:
The Consumer Choice Health Plan [CCHP] will be financially self-sustaining… The Administrator will establish and fund a contingency reserve for CCHP in a manner similar to that of the contingency reserve established by OPM for the Federal Employees Health Benefits Plan. Funds to operate the plan shall be derived from premiums for individuals enrolled under the plan and from contributions by employers not providing private health benefit plans.
[...] Premiums for the Consumer Choice Health Plan will be driven by enrollee benefit costs - not by administrative overhead or profit margins. To help enrollees afford the cost of coverage, the same health insurance subsidies would be provided to enrollees in CCHP as those offered to consumers enrolled in private health plans. [...] At a minimum, the Consumer Choice Health Plan would be required to follow the same insurance regulations as private plans operating in the exchange. CCHP would also be required to offer the same type of plans as private plans participating in the exchange.
Sounds like a good faith effort to devise a plan which can fairly compete with insurance companies.

Commentary from WSJ.com
Sen. Jay Rockefeller, D-W.Va., has emerged as a leading voice on the Finance panel for Democrats pushing for a robust, government-run, public-plan option. Rockefeller, who chairs the Senate Finance Subcommittee on Health Care, issued a proposal Wednesday for a public plan that would be an arm of the Department of Health and Human Services and pay doctors and hospitals at Medicare rates for its first two years.

Rockefeller's proposal takes aim at private insurers, which many Democrats believe are inefficiently run and overpay health-care providers. While Rockefeller's proposal would require the public plan to be "financially self-sustaining," the proposed plan would prove a tough competitor to the insurers because it could use existing Medicare provider networks.

"Private insurance companies want to have their cake and eat it too," Rockefeller said in a statement. "They want health-care reform to earn them maximum profits if they start covering millions of uninsured Americans."

Wonk Room » Rockefeller’s Public Plan Outline Relies On Medicare Plus Rates
Medicare rates aren’t all bad, but it’s unclear if doctors would be willing to accept lower fees from the new public option. In a competitive environment, a public plan that can’t attract providers will rot at the vine; in other words, to attract patients any plan would have to retain doctors its enrollees would want to see.
There's good and bad here, but mostly good. The positive element is that the Consumer's Choice Health Plan would be self-funded and self-sustaining, meaning that there would not be taxpayer subsidies for the health plan itself that would give the plan an "unfair advantage" over private insurers. While I'm unenthused that the initial reimbursement rates would be the Medicare rate, the silver lining there is that after the initial term, the CCHP would have to negotiate and compete for provider networks, which would likely result in more sustainable provider compensation. This is assuming that participation in the public plan is not compulsory for physicians, but the implication is pretty clear that it would not be. The plan (and indeed the exchange) would be open to all who want it -- not just people who are unable to find insurance elsewhere or whose employer does not offer insurance. Small businesses could participate, as could people who chose to opt out of their employer-sponsored plans, in contrast to some recent proposals which sought to shrink the pool of eligible participants in the public plan by only opening it to a limited group of people unable to get insurance otherwise.

We'll see if a proposal like this gets any traction. The Kennedy bill recently marked up had a great big blank in the slot for the public plan, but Rockefeller is on the Finance Committee, which is expected to release its own version of a reform bill soon. This could serve as a template for the public option in the Finance bill -- does Rockefeller have any influence with Baucus? I suppose we will see.

2 comments:

  1. Unless I'm overlooking something, it seems that most discussions of the public plan overlook the elephant in the room: that no public plan that accepts all comers will be able to compete with private plans which can pick and choose. Even if private plans are obligated to take all comers, what's to keep them from making sick people's experiences with them so horrid that the sick people bail out to the public plan?

    I think that the first thing we need to decide is whether or not we want healthy people to help pay for sick people's care, and if so then how we're going to implement that. Spending time on details like how much to pay the doctors seems a waste when such a fundamental question goes unanswered.

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  2. Joe, that is an easy question. No one in America is "healthy". Everyone has a disease or condition or disorder that needs immediate and expensive health care, disability payments, and a permanent "get out of work" card. If you think you are healthy, you just haven't found your personal "Golden Ticket" yet. Oh--and someone else can pay for all of us; we are entitled to all this.

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