Plenty of Barriers to That Senate Public-Option Deal

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Wednesday, December 09, 2009 at 12:34 pm

Democratic leaders have been busy patting themselves on the back this morning following the tentative deal struck last night between liberal and conservative Democrats over how to approach the public option. Details remain purposefully thin while the Congressional Budget Office crunches the cost estimate, but the various elements of the plan that have been reported leave plenty of reason to think the proposal has a tough road ahead.

1) The deal is not really a deal, but simply an agreement to send a blueprint to the CBO. Even some members of the “gang of 10″ that negotiated the proposal are already voicing their discontent.

2) The strategy reportedly eliminates an immediate public option, instead creating a trigger that would launch a public plan if private companies don’t meet certain cost and coverage benchmarks. That could lure the support of Sen. Olympia Snowe (R-Maine), but liberal Sens. Bernie Sanders (I-Vt.) and Roland Burris (D-Ill.) have hinged their backing for the overall bill on the inclusion of a strong and immediate public option. And Sen. Joe Lieberman (I-Conn.) has said in no uncertain terms that he’ll filibuster a bill that contains such a trigger.

3) The strategy reportedly keeps the plan’s administrative responsibilities in the hands of private companies. It’s unclear what this means, exactly, but if the companies will be tasked with screening claims, they have every incentive to deny needed services for the sake of generating profits and rewarding shareholders. Indeed, fixing that problem was one of the central reasons to reform the health care system to begin with.

4) The strategy reportedly would force insurers to spend at least 90 cents of every premium dollar on health care services — as opposed to administration, marketing and salaries. That’s sure to be attacked by the powerful insurance lobby, not to mention conservative lawmakers who don’t want the government dictating the business practices of private companies. Indeed, a similar proposal was shot down withdrawn in the Senate Finance Committee earlier in the year.

5) The plan reportedly would expand Medicare to allow folks aged 55 to 64 to buy in. Again, it’s unclear how patient cost-sharing and provider reimbursements would be structured, but if reimbursement mirrors that of the current Medicare program, it could lead to care access issues for those patients. Doctors have long complained that Medicare reimbursement is too low, and many providers don’t see Medicare patients at all.

For all these reasons, Democrats were smart to withhold the details of their plan, which allows them to tweak it as is necessary to keep costs down. For now, though, the ball is in CBO’s court.

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