There has been a lot of guessing recently about what the final House version of healthcare reform will look like. People have traded rumors about the House whether or not Speaker Nancy Pelosi has enough votes for a “robust” public option to survive and what will happen when the House and Senate meet to reconcile their bills. It’s time for some clarity.
The House of Representatives is about to bring its final healthcare reform bill to the floor. The vast majority of the Democratic Caucus supports the inclusion of a “robust” public option that would pay providers Medicare rates plus 5 percent, but resistance from a small portion of the caucus is threatening to derail the effort. These members want a bill with either no public option or a diluted public option based on expensive negotiated rates and phony triggers. It is crucial that a robust public option is included in the bill, and that no triggers are involved.
I, and more than 200 other House Democrats, believe that a public option should start out by paying Medicare rates plus 5 percent for the first three years because the Medicare formula is already public and well understood, and this will maintain transparency. After that, the legislation currently being considered in the House would allow the government to begin negotiating rates with providers in a manner consistent with the initial rate.
Some members prefer that a public option plan start out by negotiating payment rates with providers right away. However, Congressional Budget Office estimates show that a public option that negotiates rates with providers would only save the government an estimated $25 billion over the next ten years, versus $110 billion with Medicare-plus-five. Negotiating rates immediately would drive the public plan down a dangerous path by linking it to skyrocketing medical inflation, and would not foster the competition necessary for real cost reductions to consumers and up-front savings for the government. Just as importantly, under the negotiated rate plan, the government will have to make up any loss of coverage by putting more people into Medicaid. This will further burden states as well as greatly limit individuals’ access to providers.
A robust public option, paying fair and consistent rates around the country, will hold insurance companies accountable and provide legitimate competition, thereby reducing costs for all Americans. The 2008 census found 46.3 million Americans with absolutely no health insurance. This is not due to a lack of consumer responsibility, as some conservative commentators suggest. It’s due to a broken insurance marketplace that needs strong competition as soon as possible.
Any public option structured around a trigger would not create such competition, and would be problematic for several reasons. Passing a bill that forces Americans to buy insurance they may or may not be able to afford is not only terribly unfair as policy, it would provoke a huge political backlash and threaten any future efforts to improve the system further. At the same time, nothing would to stop Congress from continuously pushing back the trigger deadlines, just as we do now with Medicare Part D. A law that puts additional burdens on consumers while doing nothing to change the landscape of the insurance market is doomed to fail.
Healthcare legislation has been negotiated, amended, assessed and reassessed throughout the course of the year, and CBO experts have been hard at work every step of the way calculating the effects of each change. Some members are still holding out against a robust public option because, despite the analysis to date hailing it as the greatest money-saving measure we can enact, they remain unconvinced. Leadership has worked hard to craft a bill that brings down costs, cuts the overall price tag and extends coverage to as many Americans as possible. The continued resistance of some members to effective, comprehensive reform at this point seems less about fiscal responsibility and more about unrealistic and ill-defined expectations. Even with the robust plan that I and over 200 other members support, Secretary of Health and Human Services Kathleen Sebelius will be allowed to negotiate rates in certain areas if she identifies over- or undercompensated providers. There is truly no reason to object to the robust option, and I continue to believe that one will pass the House when the final vote occurs.
Paying Medicare-plus-five saves more costs, to the government and to consumers, than any alternative. It is the real fiscally responsible solution to America’s healthcare problems.