Is the House Bill a Trick or a Treat?
Happy Halloween! A number of you have expressed concern that the version of the public option in the House bill revealed last week is too soft. The concerns are important, and probably best summed up in this Brian Beutler article, which asks:
“The idea has always been that if the public option were able to save on administrative costs and provider rates, that it would be able to provide more competition," Park says.
“So does that mean that the (weak) public option is superfluous? If it's just a separate, but unequal insurance plan for people who need a lot of medical care, and won't put downward pressure on premiums in the private market, what's the point? Well, it's possible that without the public option, these same, sick people would be paying yet more still. Additionally, as the insurance exchanges grow to include a broader, healthier segment of the population, the mix of people will be healthier, and the public plan's negotiating power will increase. But it's certainly a weaker animal than it could have been.
“Park says the best hope for reform is to create strong regulations and a strong public option, and the worst hope for reform is to create weak regulations and no public option--and that the House performs much better on this score than the Senate does. But was Pelosi right? That there's no philosophical (or, at least, theoretical) difference between a public option that sets rates, and a public option that negotiates them? This CBO report suggests otherwise.”
So is there anything to like in the House Bill?
Yesterday, Ellen Shaffer of EQUAL Health convened a conference call with health care reform advocates across the country, and the largely disappointed group mustered a cautious "yes" – with some important qualifiers.
First, five good components that flesh out Beutler’s mild endorsement:
1. The exchange part of the bill includes more employers over time than the previous version.
2. The loss ratio is 85%. (The loss ratio is the measure of how much is spent on health care vs. profit and overhead – the higher the better. 85% is slightly higher than the current ratio of 81%, but not as high as the 95% loss ratio back in 1993. Senator Feinstein herself has noted that the loss ratio should be at least 90% or higher, which would mean 90% spent on actual medical care, with only 10% spent on health insurers’ profits and administrative costs.)
3. There will be no rescissions or pre-existing condition barriers.
4. The income level for Medicaid eligibility is increased, which constitutes a back-door entry into another type of public option. This is similar to what UCB Professor William Dow had proposed at our Feinstein 1200 seminar back in September.
5. Medicare can negotiate drug prices (!)
Although Ellen Shaffer is guardedly optimistic, she agrees that there is potential: “Though the insurance companies are big winners, the bill is better than what we have now and gets our foot in the door for future reform.” As an example, she notes the fact that “the bill gets us to 96% population coverage,” which “presents a structural need for that reform, e.g. rate-setting. Both government and employers will feel that pressure.”
Did she say rate-setting? Then Senator Feinstein’s proposal for a regulatory rate authority to control premiums could actually play an important role in reinforcing the House bill’s leverage. As Dianne herself wrote in her October 23 memo:
“Private insurance companies should not be trusted to contain premium growth. I am developing a proposal to create a Medical Insurance Rate Authority for every state. It would regulate premium increases in the state’s market. Companies would not be permitted to increase premiums more than the rate of medical inflation unless they received permission (by majority vote) of the Rate Authority.”
The House bill may come up for a vote on Tuesday or earlier – so Ellen Shaffer and the group advise using this weekend to contact legislators to ask for the following:
1. Vote to include the Kucinich amendment, which would allow states to institute single payer systems;
2. Let everyone participate in the public option;
3. Make the public option available immediately, not in 2013;
4. Provider payments should be based on Medicare +5%, not negotiated rates.
Here are links for Nancy Pelosi and Harry Reid, and I'll have another list of legislators for you tomorrow morning.
http://speaker.house.gov/conta
http://reid.senate.gov/contact
Community Notes:
Ellen Shaffer will appear on KRON-TV’s public affairs program this Sunday at 8:45 a.m. She is also planning an event for the afternoon of December 6, 2009, so if you would like to meet a real local hero who’s been fighting for health care reform for several decades, please mark your calendars! She's an expert at all these proposals and legislation, not to mention something of a historian on the process, so if you can make it, you will finally get some real answers.
I’ll have reports on last week’s demos early this week.
I spoke with Jeff Harry, the NorCal Regional Director of OFA at Tuesday’s event at UC Berkeley. As you know, I’ve not been uncritical of OFA. But they’re working on a targeted phonebanking project this week that we may want to lend our efforts to – I’ll update you on that as soon as possible. (Separately, one of our original Feinstein 1200’ers asked me to pass this along to you – it concerns a video contest that OFA is running. Here is the link: http://my.barackobama.
Please contact me with any questions or comments.
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