Baucus Gives Us Public Plans – Three of 'Em!

On the heels of last week’s three-ring circus of a public roundtable on options for extending coverage at the Senate Finance Committee, Sen. Baucus and Grassley released an options document laying out their preferred options to increase coverage.  I’ll cut to the chase: yes, the public plan is still on the table.  In fact, at least three different versions are on the table.

The pattern being followed by the Senate Finance Committee is a.) hold a hearing on an aspect of health care, b.) release a massive report outlining how the system currently works and laying out options to fix it, with no real sense of which direction they’ll go in, c.) laugh maniacally at the hours of sleep lost to policy wonks and bloggers attempting to figure out what type of a small business tax credit they’re talking about, d.) repeat process.  (Digression:  anyone who thinks that a final health care reform bill won’t top 1,000 pages needs to read these options documents.  The first one was over 50 pages, the second over 60, and they barely sketch the proposals they’re talking about.  Remind me to stock up on Red Bull when we get to mark-up.)  The first one was about the delivery system, including the underwhelming 5% bonus for primary care.  The second was on coverage and included much back and forth on the public plan which would compete with private insurance.

Those who are rooting for health care reform to include the public plan (“Plan USA” as Chuch Schumer calls it, “Medicare E (for Everyone)” as Maggie Mahar calls it) will be heartened to know it’s in there.  In fact, the options document has three different plans.  Following the tradition of Mike Myers’ “All Things Scottish skit on Saturday Night Live, we’ll refer to them as “wee,” “not so wee,” and “friggin’ huge.”

1.)    “Wee”

There would be no public plan at the federal level.  Instead, each state would be possible required, possibly encouraged to develop its own public plan.  Some states sort of already have one as an option for their state employees – presumably, this would be expanded to the general public.  Other states, like New York, have talked about developing their own and would presumably receive some subsidies from the Feds to take the idea from paper to reality.

However, this version entirely misses all of the advantaged in terms of quality, cost savings, and competition that a federal-level plan brings to the table.  Instead of “wee,” we should call it “lame.”

2.)    “Not so wee”

This option is similar to some of Schumer’s ideas.  There would be a federal level plan offered alongside private insurance plans that will be just as comprehensive in the Federal Health Exchange, but instead of all authority resting with the HHS Department, there would be what are being called “third-party administrators,” which we may as well call “brokers.”  These brokers would negotiate with the providers in their state or area, get them signed up into a provider network and negotiate payment rates.  The “third-party” nature is a little strange – would they be government employees?  Would they be subcontractors?  Would they – gulp—be people already in the insurance industry?  Mum’s the word right now – clearly the committee is trying to figure out how to create the infrastructure to negotiate with providers effectively without it seeming like they’re negotiating directly with Washington.

3.)    “Friggin’ huge!”

This is the version of the public plan most of us were expecting.  There’d be a federal agency in HHS that would be separate from the regulatory agency of HHS.  The public plan would be offered alongside private insurance in a Federal Health Exchange and would be subject to all the rules for insurers in the Exchange (no discrimination on the basis of pre-existing conditions, community rating, subsidies for those who can’t afford premiums would be identical, benefits would have to be comprehensive.)  Medicare rates +0-10% would be used, and any provider who accepted Medicare would also have to accept the plan.  This version of the plan would not be required to be solvent in the same way a private insurance company would (both “wee” and “not so wee” would have to have reserve funds.)

This is a very weird way to break out the options, honestly.  There can be many shades of grey between the three approaches.  The Schumer formulation actually borrows elements from both the “not so wee” and “friggin’ huge” options.  Even weirder, the “friggin’ huge” option, which is the most similar to what has been discussed to date, seems equal in consideration to the state-level plans, which was only discussed once in a committee hearing in an off-the-cuff fashion.  Is one or all of these meant to be a "straw man"?

But the presence of all three in the document tells us both that the Senate Finance Committee are still struggling to find a way to create a public plan that can pass muster… and that they still have no idea how they’re going to pull it off.

I’ll be back in a few hours to talk about the portion on subsidies, which is a lot more specific than anything we’ve seen to date.

(Photo credit:  Center for American Progress Action Fund on Flickr.)