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COVERAGE: To Opt or Not To Opt? Is That the Question for the Public Plan?

October 29, 2009 - 11:38am

This post appears on the National Journal's Health Care Experts Blog where you can also see what other health policy analysts have to say about allowing states to opt out of a public health insurance option.

The public plan debate marches on this week as we discuss whether or not states should be allowed to “opt-out” of the public health insurance plan. Allowing states to choose not to provide the public health insurance plan as an option in their markets has its virtues. It establishes the infrastructure necessary to create a public health insurance plan nationwide, but it also makes the decision ultimately a state judgment. This may be a safer way to go for those who worry about government expansion.

While we do not know the details of what kind of public plan states would be able to “opt-out” of, we suspect the center of gravity is closer to a level playing field approach, such as that proposed by Senator Schumer (where the plan would have to negotiate payment rates with providers) as opposed to the version supported by progressive Democrats in the House (where the plan would administer prices based at least in part on Medicare rates). If the level-playing field approach is in fact adopted, assertions that the plan would simply “underpay providers” rather than “driving real reforms that bring down costs and improve quality” are unfounded.

Also, let’s remember that all versions of the public plan under serious consideration require it to be self-financing. Taxpayers will not be subsidizing the public plan. Rather the main cost of reform will be providing low-income subsidies that can be used to purchase the policy of individual’s choice -- public or private. Americans will get these subsidies whether or not their state chooses to offer them a choice of the public plan, and whether or not they choose the public plan if it is offered to them. Therefore, the argument that somehow residents of opt-out states will be footing the bill to finance a public plan they are unable to access is just wrong. The public plan will not be financed by taxpayers.

Repeated fears that the public option will pay less than market rates and somehow be subsidized by taxpayers deny what is being considered seriously by Congress and signal paranoia about the future. Critics are right to be vigilant. But we should not decide against doing something that could add real value in markets where insurer competition is lacking just because it might possibly be “turned” into a bad idea by a future Congress. If someone proposes to give the public option unfair advantages in the future, let’s debate it then, fairly and forthrightly.

Senator Reid’s announcement is not the end of the public health insurance plan debate. A weakness of the opt-out approach is that many of the states most likely to “opt-out” because of ideological reasons are the same states that you could argue need the public plan the most because of lack of competition and affordable policies.

Moving forward we should be on the look-out for new public plan ideas that possibly meld Schumer’s “level playing field” with Reid’s “opt-out,” Snowe’s “trigger,” and Carper’s state “opt-in.” Stay tuned.

Using the "level playing

Using the "level playing field approach" means that the government will simply charge rates at a much lower price than private insurance companies can afford to and it will eventually drive them out of business. Dems keep trying to fool people with this crap. Bring real reform to the table or move on.

HEALTH CARE REFORM?

The fact is that we have an insurance problem BECAUSE of GOVERNMENT involvement of not allowing Americans to purchase across state lines.
WITHOUT CHOICE THEIR IS NOT COMPETITION AND NO QUALITY!Their goal is to put out ALL PRIVATE INSURANCE. That will give us only ONE CHOICE which is government. C'mon, wake up people.
There is an INCREDIBLE amount of money awarded for malpractice suits!
Our son's Cardiologist unfairly is stuck with a $250,000 a year price tag from Malpractice insurance. He is a fine doctor but nevertheless has to have this because the trial lawyers suing is rampant. I know DOCTORS WILL LEAVE MEDICINE UNDER THE PUBLIC PLAN. This is dangerous to the American way. Think it is free? Medicare and Medicaid have cost us alot and are broke.Furthermore, our representatives had greatly underestimated their costs.Cost too much than the care will have to go. I URGE AMERICANS TO LOOK AT ENGLISH HISTORY.The English started their "public option" for troops and the costs have cost them their economy. Foreigners have overwhelmed the system for the promise of "FREE HEALTHCARE FOR ALL."My husband is English and the hospitals can turn you away, yes even for an emergency!For those public option seekers have you thought about doctor shortages, influx of illegals wanting free care and overwhelming the system. Sure, sounds great my mom needs care and can't get it because ten illegals are before her. Think it can't happen? It is and will get much worse under a public plan.The Queen of CA Ms. Pelosi will see to it. More voters for her since she's ticked off most everyone else.
A public option will break our economic backs which is already bursting. I do not have insurance and cannot afford it. Still, I know this administrations intentions is to DO AWAY WITH ALL PRIVATE INSURANCE! This is the real plan people! PLEASE WAKE UP AND SMELL THE SOCIALISM. Talk to people who live under a socialistic regime. See the BIG picture. Furthermore if the public option doctor cuts off your foot...Tell me, what are ya goin do? Sue the government? Sorry, that won't happen. Want a choice, better start fighting AGAINST THE PUBLIC OPTION and for PRIVATE INSURANCE CHOICE!