HR 3200’s “public option” will not resemble Medicare - by Kip Sullivan

[slipslidingaway]

http://pnhp.org/blog/2009/09/13/sullivan-publicoptionin3200unlikemedicare/

"Advocates of a “public option” claim that the “option” will look like Medicare. They say this about the “option” in both bills that have been introduced to date – the House “reform” bill, HR 3200, and the bill written by the Senate Health, Education, Labor and Pensions (HELP) committee. But this statement is not true.

Medicare is larger than any private insurance company; the “option” in both bills will be small. The traditional Medicare program is a single program with uniform benefits; the “option” in both bills will be a balkanized program that may not be available in all parts of the country. Medicare is administered by public employees; the “options” in both bills will be administered by private-sector corporations, some or all of which will be insurance companies. The “option” in neither bill resembles Medicare...

***Review of two previous papers

The “option” provisions of the Senate HELP Committee bill appear in Section 3106. HR 3200’s “option” provisions appear in Title II, Subtitle B, entitled “Public health insurance option.” I have already discussed in some detail Section 3106 in a paper posted on August 14. Readers who want more details on Section 3106 should read that paper.

In another paper I have discussed the claim by “option” advocates that the “option” in HR 3200 is superior to the “option” in the Senate HELP bill. Those who make this claim rest their argument on a mere two sentences in HR 3200. One sentence says doctors and hospitals that participate in Medicare will be deemed to be participants in the “option” unless they “opt out” of the “option.” The other says the “option” is authorized to pay providers at rates linked to Medicare’s rates. Neither argument makes sense. Both sentences are useless and do nothing to augment the power of HR 3200’s moribund “option.”

The purpose of this paper is to examine the rest of the “option” provisions in Title II, Subtitle B of HR 3200 to see if there is any reason to describe HR 3200’s “option” as “like Medicare.” I begin with a summary of the ways in which the “options” in HR 3200 and the Senate HELP bill resemble each other...


Below are the others areas in covers in more detail


***Comparison of the “options” in HR 3200 and the HELP bill

***Reid and Kirsch agree the “option” could be run by a private corporation

***Reading the entrails of HR 3200

***HR 3200 authorizes contracts with multiple corporations

***Loan repayment provision

***Direct contracting

***The logistics of creating the “option”

***We need truth in advertising about the “option”

..."

[bkkyosemite]

1. This infuriates me! I did not think a PUBLIC option would be controlled by a PRIVATE insurance or

otherwise company. Disgusting!

[slipslidingaway]

7. Well I'm glad that someone is reading the bills to determine how

this public option(s) is structured in the proposed legislation, now is the time to be asking questions.

[truedelphi]

11. Yes for all these reasons - I am hoping that Harken is right

About it taking so long (Until December)

But Obama is employing what Naomi Klein would call "a shock scenario."

Obama is suggesting that we need health care insurance "reform" passed right away - better right now than to wait even another fifty seconds.

We watched our Congress fall in line when the Shock Doctrine was utilized for the purposes tof the Iraq War resolution, then it was used for FISA, then for the BailOut, and now for this.

Any time any politician says this or that has to happen right this minute, I am always afraid. Very very afriad.

[stray cat]

2. It pays to know what is meant by public option since so many are against insurance regulations

w/o it.

[Ewellian]

3. Medicare is not

administered by public employees and never has been. It's administered by private companies under contract to the federal government.....just like the proposal for the public option.

[FarCenter]

4. Medicare part C (Medicare Advantage plans) are provided by private insurers subsidized by Medicare

Medicare Parts A (hospital) and B (medical) are administerd by private insurers under contract with Centers for Medicare and Medicaid Services.

Medicare Part C is subsidized private insurance plans.

Part D is drugs.

The biggest difference is that Medicare plans of any sort are funded by all the Medicare taxes paid by the people not yet retired. So the amount paid by retirees is minimal.

[slipslidingaway]

8. He speaks of that further down in the article n/t

[mistertrickster]

5. Here's a good definition of the public option.

From Tom Foley at Healthcare.change.org

If you have 30-40 million people in one giant pool of customers, with many of their premiums subsidized by the government, this is a pretty great deal for private insurance (the Health Care Exchange). Sure, there are new regulations, but they’re not being asked to fundamentally change their business practices. The “game” of creating profit by finding ways to attract healthy customers who won’t need that much care and to reduce the amount of care they pay for existing customers goes on. The game has no incentives for operating more efficiently, with less administrative waste or executive compensation, or for delivering more quality care.

So how do you change the game? The solution favored by the president and many others is to introduce a new player into the market with different incentives. As a government-run insurance plan, it won’t have to make a profit, won’t have to pay a CEO’s salary, and will have lower administrative costs (currently, administrative costs are 3% of Medicare, 7% of Medicaid and 15-30% of private insurance). It would have incentives towards quality, presuming you’re a long-term customer because the government will eventually be paying for your Medicare costs. It would have an incentive to use its bargaining power to achieve lower costs -- savings it would pass on as lower premiums. And it would force private insurance to compete on those terms, or lose customers. It would change the game.

[mistertrickster]

6. Here's Robert Reich in a Robert Greenwald video explaining the importance

of the public option.

It's only two minutes long.

Watch it and pass it on.

http://www.youtube.com/watch?v=ZXFHXqrrJ6g

[slipslidingaway]

9. But what happens if there are several "public options" that need to be

self-sustaining.

From a prior article...

http://pnhp.org/blog/2009/08/14/the-senate-help-committee-“public-option”-will-be-multiple-“options”-and-these-will-be-run-by-insurance-companies/

"...But the third sentence confuses the reader by referring to the local entities as a single program:

“The Secretary shall establish a community health insurance option to offer … health care coverage… throughout the United States.”

But as we read on, we encounter provision after provision that indicates the HELP Committee definitely envisions a balkanized “option.” Some provisions reveal that intention by referring to “options” plural. Others reveal it by giving the states the authority to determine essential features of “options” sold within their boundaries, such as the required reserve levels and maximum benefits. A single national program can’t have 50 different reserve requirements and 50 different benefit levels.

Here are two examples of the use of “options” plural in Section 3106: (1) Under a section entitled “Applicable rules,” we learn a previously enacted law “shall apply to community health insurance options”; and (2) a section entitled “Ombudsman” begins, “In establishing community health insurance options, the Secretary shall….”

Here are two examples of provisions giving the states authority to define key features of “options”: (1) The only sentence in a section entitled “States may offer additional benefits” reads, “A state may require that a community health insurance option offered in such State offer benefits in addition to the essential health benefits required under ”; and (2) under a section headed “Solvency,” we find, “A community health insurance option shall … be subject to the solvency standard of each State in which such community health insurance option is offered.”

A patchwork of 50 different reserve requirements and 50 different benefit levels seems a far cry from “public option” proponents’ vision of a single, Medicare-like plan covering the whole country..."

[slipslidingaway]

10. kick n/t

[Echo In Light]

12. So, realizing the outrage over no PO = mutate the PO = fulfills required illusion = problem solved?

Ugh

[slipslidingaway]

13. Or...

sell the large public option vision (pull in SP advocates), let Congress work on the details and wind up with something that can still be called a PO.

Either way - ugh.


Posted by Don McCanne MD on Wednesday, Jun 17, 2009

http://pnhp.org/blog/2009/06/17/sebelius-flat-out-never-single-payer/

"...The proposal to provide a government-run Medicare-like program as an option for purchase within an insurance exchange of private health plans is vehemently opposed by the insurance industry, the U.S. Chamber of Commerce, the AMA, all Republicans, a large bloc of conservative Democrats, and many others. No amount of negotiation can resuscitate a Medicare-like option. It’s dead.

To avoid losing the support of the progressives and many of the moderates in Congress, efforts are being made to create a new private program that has distinguishing features, primarily cosmetic, that will allow them to mislabel it as a public option. The fear of opponents is that this pseudo-public option could later be transformed into a government-run program. Thus it is imperative that the design of the option would lock it up as a private sector model with no possibility of transformation. Without that assurance, the pseudo-public option will have to be eliminated during markup in order to salvage other reform policies. The opponents will never ever sign on to single-payer-in-waiting.

Those in the progressive community who abandoned single payer to support a public Medicare-like option, believing that this was the politically feasible strategy for success, simply haven’t been paying attention if they still really believe that a government-run public option can survive."