How The House’s Public Option Might Differ From The Senate’s
We now have the legislative language for the House’s less robust public option (PDF page 211), and it has been reported that Harry Reid plans to include the Senate HELP Committee’s public option–with some form of state opt-out procedure. (Whether legislative language for the public option in the merged Senate bill is exactly identical to the HELP committee’s public option is not yet 100% guaranteed. We will not know until Reid releases his bill–presumably after the CBO scores it.) Both public options would be very similar. They would only be available on the new exchange. They would both be run by the HHS, and negotiate rates with providers. In both cases, the providers’ rates will not be higher in the aggregate than the average rate for other plans on the exchange. While similar, there are a few important differences.
The biggest difference between the House’s public option and the Senate’s public option will be the state opt-out provision. Harry Reid has not yet released how the opt-out would work, but it would give the state government the power to stop the public option from selling health insurance that state. The House’s public option will be a true national public option without an opt-out.
Presumed Enrollment and Provider Opt-Out
The House’s public option has presumed Medicare provider enrollment with a provider opt-out provision. This is a huge strength that makes the House’s public option better than the HELP committee’s public option. Under the House bill providers that are part of the Medicare network would be presumed to want to take part in the public option. Medicare providers can easily opt-out of the public option before it starts, and would face no penalty for doing so. This presumed enrollment should make it much easier for the public option to get up off the ground. The HELP committee’s public option would require providers to actively sign up for the program.
Provider Rate Floor
The House public option would set a provider rate floor. It could not pay providers less than Medicare rates. The HELP public option contains no rate floor. In theory, it could negotiate rates even lower than what Medicare pays for a procedure. While that is unlikely to happen, it is possible that there are some procedures where Medicare is paying above market rates. Because of this small bit of added flexibility on this issue, the HELP public option is technically slightly stronger. Both would not pay rates in the aggregate higher than the average for other insurance plans on the exchange.
State Advisory Councils
Under the HELP public option each state would establish public or non-profit State Advisory Councils. They would be responsible for making non-binding recommendations to the Secretary of HHS on how to better run the public option in their state. What effect their non-binding recommendations would have is hard to guess, but, in general, it sounds like a smart if limited idea. The House bill would not create State Advisory Councils.
Preferred Physicians and Participating Physicians
The House bill directly spells out how the public option’s physicians network would work. It would have “preferred physicians,” who would be like in-network providers that accept the negotiated rates as full payment. It would also have “participating, non-preferred physicians.” They agree to not impose additional charges equal to or greater than 15% above the negotiated rate. They would function sort of like out-of-network providers. The HELP bill does not spell out how the public option’s network would work.
Besides the state opt-out (and we still don’t know how that will work), the most important difference is the presumed enrollment for Medicare providers. The House bill will not force any Medicare providers to take part in the public option and would let them start opting out a full year before the program starts. But it is just human nature that people are much more likely to not drop out of a program than they are to actively enroll in one, regardless how easy it is to enroll or drop out. The benefit of having a ready network to potentially build off of could be critical to successfully launch a new nation-wide insurance entity. Maintaining this provision is very important moving forward.