5 Flavors of Public Option

This week will reveal the frustrations of a representative democracy more than any in recent history. It’s too much to expect our Congressional representatives to vote based on what a majority of their constituents want, a public option that is cost-effective and covers most of the population. Between partisan politics and the measurable effect of even small amounts of insurance lobby money, constituents seemingly can’t make their voices heard. So Congress will be presented with 5 flavors of ice cream from which to choose. Here are the public option flavors of the week, and if you need a little musical flair to get you excited about them, we’ve got that too.

First, from the Billionaires for Wealthcare, who crashed the AHIP annual meeting in Washington, D.C., last week, here is “The Public Option” sung in show tunes:

Now that you’re in the public option mood, here are your flavor choices:

House: Medicare Part E
Under any of the options below, the House bill covers 96-97% of Americans, includes a generous $700 billion subsidy package to help people afford insurance, expands Medicaid, and includes an employer mandate. As far as we know it still includes funds for the “doc fix” so physician Medicare payments aren’t reduced by 21% next year. Bill funding is designed to come from taxing incomes over $500,000. Whichever option is selected will be revealed soon, as Nancy Pelosi intends to release the House bill this week and hopefully hold a floor vote next week. She’s efficient!

1. Medicare +5%: Pelosi’s favorite, this is the most robust public option under consideration and considered the most ambitious, though it would cost the least. As it stands, it would pay physicians Medicare rates +5% and hospitals base Medicare rates. CBO estimates it would cost $871 billion and be deficit-neutral over 10 years.
2. Medicare Negotiated Rate: Same concept as #1, except it would negotiate rates with providers instead of having them tied to an existing benchmark. Pelosi considers this option likely to get more votes, and as she caucused on Friday with a “live whip”, requiring each Representative to voice their level of support for each option, she should know. Sorry, no cost estimates on this one, but it would shift more cost burden to the states by raising Medicaid eligibility from 133% to 150% of the poverty rate.
3. Medicare Trigger: This option would, as the name implies, only kick in if private insurers weren’t meeting pre-determined metrics after a prescribed period of time. It is pretty much dead, as Pelosi is putting together a far bolder package than Harry Reid and company in the Senate.

Senate: Public Lite
As it currently stands, the Senate bill costs approximately $829 billion, covers 94% of Americans, includes a $450 billion subsidy package to help people afford insurance, expands Medicaid, and does not include an employer mandate. There are no funds for a “doc fix” – this provision was included in a stand-alone bill and defeated. Bill funding is designed to come from taxing family healthcare benefits over $21,000.

1. State Opt-Out: Chuck Shumer’s baby, it’s the “I’m not government-run” public option. A non-profit board would be established and given federal seed money. All states would initially participate in this more affordable insurance option, and would be given the opportunity to opt out in 1-3 years. In a nutshell, this is the Giant Co-op model, trying to establish a new Blue Cross Blue Shield-type insurer answerable to the government.
2. Trigger: Olympia Snowe’s proposal surprisingly found its way into bill merger discussions. Surprisingly, because she seems to be the only one who supports it. Like the Medicare Trigger option, it is designed to kick in at some point in the future if conditions aren’t met. History has shown that healthcare triggers are destined to fail, including ones in HIPAA individual plans (federal government couldn’t determine that state approaches failed), and Medicare physician payments (set up an annual political battle with no solution.) If you are thinking that this is the “No Public Option” option, you’re right. That’s despite 70% of Snowe’s constituents supporting a public option.

So there you have it, 5 flavors of ice cream. They can be summed up as Mocha (bold and rich), Coffee (bold), Coffee Tofutti (bold but not real), Vanilla Ice Milk (little flavor with sharp ice crystals), and Ice Cream IOU (a worthless piece of paper.)

Photo david.nikonvscanon // CC BY 2.0