It is well-known that the House bill, the Affordable Health Care for America Act, contains a "Public Health Insurance Option" - a government-run health insurance company that would have competed with private insurers to provide coverage for American citizens. It is also well-known that the Senate rejected this provision in its bill, the Patient Protection and Affordable Care Act. Less appreciated is the fact that the Senate bill contains two provisions that would extend government financed health care to millions of more people than the "public option" in the House bill would.
The Senate rejected the "public option," even with "opt out" or "trigger" mechanisms that would have made the program optional with the states or contingent upon circumstances such as lack of competition in the marketplace or rising costs. However, the public option was not expected to cover very many people, under either the House or Senate version of health care reform. The CBO estimated that under the House version of the reform bill six million people would have enrolled for coverage by 2019, and that the Senate plan would have attracted only two or three million enrollees by that time.
However, the Senate bill contains two provisions that promise to extend efficient, low-cost, government-financed health care to tens of millions of American citizens – the Basic Health Plan introduced by Senator Maria Cantwell (D-WA), and additional funding for Community Health Centers which was included at the urging of Senator Bernie Sanders (D-VT). I have written about these provisions previously (here and here).
The Kaiser Family Foundation website contains an informative side-by-side comparison of the House and Senate bills. Here is their description of the Basic Health Plan, which would allow the states to use the money that would have gone to low-income individuals to purchase health insurance for them as a group:
Permit states the option to create a Basic Health Plan for uninsured individuals with incomes between 133-200% FPL who would otherwise be eligible to receive premium subsidies in the Exchange. States opting to provide this coverage will contract with one or more standard plans to provide at least the essential health benefits and must ensure that eligible individuals do not pay more in premiums than they would have paid in the Exchange and that the cost-sharing requirements do not exceed those of the platinum plan for enrollees with income less than 150% FPL or the gold plan for all other enrollees. States will receive 95% of the funds that would have been paid as federal premium and costsharing subsidies for eligible individuals to establish the Basic Health Plan. Individuals with incomes between 133-200% FPL in states creating Basic Health Plans will not be eligible for subsidies in the Exchanges.
Essentially, under the Basic Plan the federal government would subsidize the states to contract with health insurance companies – or perhaps even provider systems – to provide health care for persons earning less than double the federal poverty level. (The FPL for 2009 is $10,830 for an individual and $22,050 for a family of four.) It is a safe assumption that by pooling the purchasing power of every individual and family earning between 133% and 200% of the federal poverty level into one group plan, the state could purchase insurance at far lower cost than these people could acting as individuals. Furthermore, this would save the federal government money – it would pay the states only 95% of what it would have paid the individuals. I expect that many states would choose this option, and that participation in the Basic Plan will far exceed what enrollment in the "public option" would have been.
In addition, the Senate bill establishes a "Community Health Services Fund" (starting at page 329 of the Manager's Amendment) which vastly expands funding for community health centers and the National Health Service, as well as funding a three-year demonstration project in up to ten states that would provide low-cost health care to the uninsured. The Community Health Services Fund could end up supporting primary medical and dental care and establishing medical "homes" for tens of millions of Americans.
In my opinion, the Basic Plan and the Community Health Services Fund – each of which may contract with for-profit and non-profit health care companies to provide care for low-income persons – are far more promising than the public option contained in the House bill or the one that was initially contained in Senator Reid's bill.
Our common goal is universal health care that is both affordable and of high quality. I predict that House Democrats will embrace these two provisions as a more than adequate substitute for the public option contained the bill that they originally enacted, and that many Republicans, while still voting against the bill, will find these provisions attractive – particularly in states with large rural areas that rely on community health centers for primary care.
Visit Professor Huhn's website on health care financing reform for links to information about proposed legislation, studies and reports, public agencies, and private organizations concerned with this issue.
{ 2 comments… read them below or add one }
Dear Professor Huhn,
I believe the analysis while legalistic in nature, accepts the lobotomy of Bills as an inevitable result of Corporatism and Politics as Usual Swamp of Washington. Obama campaigned on and got sent to the whitehouse on the promise of draining the swamp. His non-delivery is also accepted by the establishment media and the cognizant by explaining away Obama as a regular old establishment politician rather than the transformative leader he projected. A small note on COTS follows at the end; one can self quiz to see if they qualify to be its member.
You seem to be treating the Bill as a welfare program for the really poor. This case seriously overlaps with Medicaid expansion.The reduction of bone-crsuhing premiums for the middle class can only be reduced by cost reduction. The limitation of a Public Option properly run will go away in due course. At least it is a wedge. There are some serious misrepresentation of the bill as described below, it will be really nice to know if the points are worthy of consideration and rectification.
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The disingenuous or false statements made by Team Obama and collaborating members of Congress, to transform the critique of the Bill into praise and gratitude by the public, are sickening and demoralizing. Their credibility can not be raised by constant repetition by increasing number of protagonists. Unfortunately many hosts who were challenging the falsehoods head on are doing so less and less, perhaps because they are getting tired and increasingly resigned to inevitability of a flawed bill. However this technique can not work because it will be very hard to create a collusion involving millions of progressives and independents. It is too bad that many defenders want to be trusted because of their eons of experience in the Washington scene, which has not even helped them develop enough intellectual honesty to recognize this basic concept. Some of the most egregious half truths going unchallenged are:
1) Subsidies and exchanges etc start in 8014, thus all this sobbing about 45k dying is at best crocodile tears. If true ED we should not be talking any other topic at all. Do you not want to see how can we stop these deaths immediately?
2) Insure 31M (not 47M) by 2019, not exactly a crash program, is it? Why do they not point out that tax payer money will be squandered on high bone crushing premiums (and more than proportionately higher subsidies) which are projected to grow 111% by Ins Industry's own estimates.
3) No clear description of what new alternatives, which provide the same cost lowering and competition as the Public Option, have been created and which were not present in Obama Campaign's Health Care plans.
4)Ban the insurance denial based on pre-existing conditions. Bu the differential of older people with pre-existing conditions can be upto 300% in the Senate Bill and 200% in the House Bill. The same number is 20% in Vermont state regulation. At this number people higher than 400% poverty level will not find it affordable. For those eligible for subsidies, tax payer will be hit for obscenely high amounts.
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Most of the MSM are dues paying members of the "Church of the Savvy". CNN flock is headed by Bishop Blitzer. MSNBC has rather tiny contingent prominent among them Bishop Matthews assisted by Deacon Todd. My puzzlement with the leaders of COTS behavior was finally removed by Jay Rosen's interview by Laura Flanders of gritTV. A must see to understand the MO of COTS. MSM print media, e.g. NYT, LAT, WAPO, Mercury, Tribune, Globe etc. are life members of COTS. As for FOX they have started an off shoot called "Church of Conniving Knights" headed by the fire and brimstone preacher Beck.
Arvind,
There are two paths to universal coverage. One is for the government to assume responsibility for paying doctors and hospitals, either as an insurer or as an employer. This is the system in Canada and Britain. The other is for the government to subsidize the purchase of private insurance as in Germany and the Netherlands. You and many other progressives favor the first approach, and you may be right – that may be the only way to get costs under control. But the simple political fact is that America is not ready for that – there are not the votes to achieve that either in the House or in the Senate – not even close. So even if President Obama personally favors a government solution – and he is on record as favoring a "single payer" system – that path to universal coverage is not open at this time.
The other solution – that everyone who can afford health insurance must pay for it, and those who cannot will receive government subsidies to pay for it – is the one that has been adopted in the House and Senate bills. There are also many cost containment provisions, the most hopeful among them, in my opinion, being the provisions allowing states to adopt a "Basic Plan" with subsidy money, and the creation of the Community Health Center Fund, which will provide primary care for tens of millions of Americans. There are also a number of cost-cutting provisions in the bills. They don't go far enough, particularly with respect to pharmeceuticals and unnecessary treatment that is traceable to many causes including liability concerns. But I think that we are going in the right direction.
Have a little faith and hope, Arvind!