The House has released a final version of the health reform bill. It has a public option all right, but not the robust version progressives were hoping for. The public plan would only cover 2 percent of Americans and premiums will cost more than anticipated.
Meanwhile, Sen. Joe Lieberman continues to threaten to join a Republican filibuster of a healthcare bill with a public option. A lot of people still think he’s bluffing. Realistically, the public option probably faces more serious threats from inside the Democratic caucus. It’s been whittled down at an alarming rate.
Nick Baumann of Mother Jones asks “What now for the public option?”
The Congressional Budget Office has estimated that public option premiums will actually be higher than the premiums for private plans on the health insurance exchanges. That doesn’t mean it’s going to cost the government more money–the public option is paid for by premiums, not taxes; it actually cuts the deficit. But it will be more expensive than some private plans. Wasn’t part of the point of the public option to prove that a government-run program could compete successfully with privately-run plans? Well, yes, but here’s the problem: that was all based on the idea that the public option would pay healthcare providers at Medicare rates.
Baumann predicts that insurers will do everything they can to drive the sick people off private insurance onto the public plan, a phenomenon known as “adverse selection.” Hopefully some of the proposed insurance reforms will curb their worst excesses, like rejecting insurance applicants for misspelling their pre-existing conditions on their application forms.
Mike Lillis of the Washington Independent reports that the House healthcare bill would eliminate the popular and cost-effective Child Health Insurance Program (CHIP) and shift its low-income beneficiaries onto private health insurance exchanges.
This looks like a stealthy pre-emptive strike on the prospect of single-payer healthcare. CHIP is a single-payer program that progressive health policy types envisioned as a prototype for a future single-payer system for all kids, or even eventually for everyone.
As Lillis points out, abolishing CHIP is also a gimme to insurance companies. Generally speaking, kids are cheap to insure because they’re healthy. Private insurers would love to stock their risk pools with kids on federal subsidies. It’s like getting paid to stock your pond with delicious trout. We worry about adverse selection making the public plan more expensive. Well, CHIP is the reverse of that because this public program is keeping the good risks for itself.