The endgame on the public option could come as early as today. The negotiations seem to be coalescing around an expansion of Medicare and Medicaid as an alternative, some unnamed stronger insurance regulations, and additional elements, amidst a host of questions.
Would there be anything at all left of the public option, even with a trigger, or would adults above 150% federal poverty level and below the age of 55 be confined to the exchange? Would anyone 55-64 with employer coverage be eligible (Probably not)? What would the impact of taking higher-risk individuals off the exchanges have on their prices? Would the exchanges serve so many less people as a result, however, that their collective bargaining power would be blunted? Would the rates for Medicare buy-in be too exorbitant for potential subscribers? How would states be affected by expanded Medicaid funding over time? Would the feds still carry the full cost of expansion in the first three years, now that the expansion is larger? Would the issue of provider reimbursement rates, a major sticking point during the Medicare + 5% conversation, rear its ugly head again?
Are the nationwide, privately-run, nonprofit health plans overseen by the Office of Personnel Management still part of the mix, as the AP says they are? What if no private insurer wants to offer them? How would that plan interact with subsidies? Would the FEHBP benefits be too expensive for individuals to afford, without the generous subsidies given federal employees? Is there a state opt-out on the FEHBP/OPM plan, as has been reported? I could go on.
Perhaps because of all these questions and more, this is not a done deal. Just because Ben Nelson says there’s support for these new measures doesn’t mean they’ve earned his support. The fact that Joe Lieberman skipped out on the Gang of 10 meetings, necessitating Tom Carper to have to fill in for him, suggests that he may not be so amenable to the compromise. And there’s still people like Sherrod Brown, who while in the room for negotiations, isn’t all that pleased with them, and neither are a lot of activists:
Progressive senators reacted more positively to the developments than did activists. Their reaction to the swap of a public option for a national nonprofit insurance plan might have been best captured by a spokeswoman for one of the major groups pushing for a public plan, who wrote on her personal blog: “The latest noncompromise compromise is absolute crap and totally unacceptable.” […]
Sen. Tom Harkin (D-Iowa) said the group was on the verge of a compromise, possibly by Tuesday afternoon.
“Will it be something that I like? No. But it’s not going to be something that the moderates or the conservatives like either … It’s going to be one of those things in the middle that doesn’t make everyone happy.”
The ability of the negotiating to reach a compromise would break the deadlock over the public option, but any agreement would still need sign off from Reid and the White House.
For his part, Brown said the public option is not dead.
“It’s not,” Brown said as he left the negotiation session Monday night. “There’s no agreement on anything.”
(By the way, the “absolute crap” comment came from Jacki Schechner of HCAN.)
One of the bigger issues I didn’t mention is, when will Medicare and Medicaid open up? Jon Cohn reports that there are two options on the table:
Since exchanges wouldn’t begin operating until 2014, at least under the Senate bill, the option wouldn’t be available until then. And that’s a long time to wait, particularly given the target population. People between the ages of 55 and 64 have a notoriously hard time buying coverage on their own, since their age and higher incidence of disease makes them the sorts of high medical risks insurers don’t want to cover.
The senators negotiating this deal understand this, according to senior staffers. And while no decisions have been made–indeed, this whole deal is in flux, with numerous moving pieces–the staffers say the senators are thinking about one more twist: Making Medicare available even before the exchanges start up, perhaps as early as 2011.
Making Medicare available before the exchanges are ready gets complicated, because the premiums will inevitably be more than many workers can afford. (The idea is to make the program pay for itself, rather than dipping into the pool of funds for retirees, so the money coming in has to cover the medical bills this relatively unhealthy group would generate.) As such, Senators are examining whether it’s possible to offer discounted premiums for the first few years, and then charging higher premiums later on to make up for it. (At that point, subsidies from the exchanges would be available to offset the costs).
Obviously, all of these questions will be answered in due course, and probably later today, as Harry Reid has set a deadline for these negotiations to allow him to still finish a bill by Christmas. But let me say one thing which might seem paradoxical: the slow, agonizing death of the public option – and what may be replacing it – proves why you need a public option.
Let me explain. At the end of the day, the only way to eliminate the government-run plan was to expand the already operating government-run plans – Medicare and Medicaid – to around 40-45% of the uninsured who would be eligible for the exchange (a higher rate than the public option on offer, mind you). These plans came into existence in 1965, have become cherished by both parties – at least rhetorically, as we’ve seen in this debate – and therefore were candidates to expand, to compensate for the lack of a public plan. In other words, the architecture of Medicare and Medicaid was built in the 1960s, and it continues to expand to this day.
That was the promise of the public option – creating the architecture of a plan that would not be walled off to the poor or the elderly, but potentially open to everyone. Yes, it was constricted at first, only sold on the exchanges for individuals and certain small businesses. But it had the potential to gain trust, and become normalized in the way that Medicare and Medicaid are, and from there grow. Nobody thought the public option on offer, with the state opt-out, was any kind of perfect object – far from it. It was the act of setting up such an option, an alternative to private insurance that could over time, with enough market share, force that private insurance to compete – that was what was truly desired. Medicare and Medicaid prove the point that a public plan will improve and expand over time, if for no other reason than the fact that private insurance is completely unsustainable and has to act criminally to survive.
Without a public option, we are far less prepared for what will happen when the private health insurance system ultimately collapses. All the liberal pragmatists arguing against it saw the public option as a static object with static rules. This possible trade-off for Medicare and Medicaid expansion shows that to be short-sighted.
Incidentally, there are several dozen House members who aren’t going to be terribly pleased with seeing their months of legislative work ignored and thrown in the garbage, especially if they don’t even get a conference committee out of it. So while we could hear about a “deal” today, remember that it’s only a deal if everyone agrees to it.