Why The House’s Public Option Is Better Than Kennedy’s Public Option
Why The House’s Public Option Is Better Than Kennedy’s Public Option
The new House bill seeks to reduce health care costs by establishing a robust public health insurance option that takes complete advantage of Medicare’s leverage and lower reimbursement rates.
Initially, given its limited size, a public health insurance option may have difficulty securing cheaper rates with providers. But by reimbursing providers some percentage above Medicare rates, the public option would benefit from Medicare’s ability to negotiate with providers (and given its size and national presence it can negotiate lower rates) and pass on the savings to consumers. Compelling Medicare providers to also accept enrollees from the new public option would ensure a large provider base.
Though the House bill is not perfect—it encourages providers to participate rather than compells them to—it goes much further than the Kenedy bill to take full advantage of a public plan’s market power.
Under the House legislation, Medicare providers are auto-enrolled as providers in the public option (the legislation presumes they will offer coverage unless they opt out) and their reimbursement rates, which are tied to Medicare rates for the first three years, include a 5% bonus for physicians that participate in both Medicare and the public plan.
In other words, rather than compelling participation, the bill incentivizes it and in the process secures a strong provider base that will attract more enrollees and allow the public plan to grow to a point where it can secure real savings. As the CBO notes, “on average the public plan would be about 10 percent cheaper than a typical private plan offered in the exchanges. That difference in premiums is itself the net effect of differences in the major factors that affect all insurance plans’ premiums, including their payment rates to providers, their administrative costs, the degree of benefit management they apply to control spending, and the pool of enrollees they attract.”
The new draft also includes provisions regarding a “public plan,” but those provisions did not have a substantial effect on the cost or enrollment projections, largely because the public plan would pay providers of health care at rates comparable to privately negotiated rates—and thus was not projected to have premiums lower than those charged by private insurance plans in the exchanges.
5 Responses to “Why The House’s Public Option Is Better Than Kennedy’s Public Option”
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I’m curious how much the VA spends on phama and if it’s spending can be included with Medicaid and the public plan in negotiations for even greater savings.
July 15th, 2009 at 1:13 pmThe way I read them, both bills work to keep the bulk of Americans out of the public plan. The House bill, which is the better option, only allows for the Commissioner to consider expanding eligibility in Year 3. It seems that the decision will be based, in part on studies run by the Commissioner to see if there is need for expansion. (p. 83) Am I reading that correctly?
July 15th, 2009 at 1:23 pmTHIS IS IT!
The healthcare reform bill released by the House Of Representatives is an excellent bill as I understand it. It is carefully written, and thoughtfully constructed, informed, prudent and wise. This bill will save trillions of dollars, and millions of your lives.
This is the type of bill that all Americans can feel good about. And this is the type of bill that has the potential to dramatically improve the quality of healthcare for all Americans. Rich, middle class and poor a like. Democrats, Republicans, Independents, and all other party affiliations. This bill has the potential to dramatically improve the quality of life of every American.
The house healthcare bill should be viewed as the minimum GOLD STANDARD by which all other proposed healthcare legislation should be judged. All supporters of true high quality healthcare reform should now place all your support behind this healthcare reform bill released by the United States House Of Representatives, as the minimum Gold standard for healthcare reform in America.
You should all now support this bill with all your might, and all of your unrelenting tenacity. This healthcare bill is a VERY, VERY GOOD! bill for all of the American people. Fight tooth, and nail for every bit of this bill if you have too. Be aggressive, creative, and relentless for this bill.
AND FIGHT!! like your life and the lives of your loved ones depends on it. BECAUSE IT DOES!
SPREAD THE WORD
(http://www.youtube.com/watch?v=RSM8t_cLZgk&feature=player_embedded)
God Bless You
Jack Smith — Working Class
July 15th, 2009 at 9:19 pmI have actually waded through the bill (took two days off school and read until I went blind) and my concern is that while it is a good beginning, it is just that. And I could accept that…I understand that in the beginning, Social Security was not as comprehensive. What I don’t support and what I don’t understand is why it does not go into effect until 2013. Not only do I have concerns for people who need health care NOW, I have concerns what this will do politically if the general public, who scans the headlines and sees that reform has been enacted and then doesn’t see the result of that reform for 4 years! Personally, I wish to extend the Democrat Platform for more than 4 years yet I fear that giving the dog a bone and then snatching it away might result in getting bit.
July 16th, 2009 at 4:41 pmAre you kidding me? Both of these bills propose to leave the blood sucking insurance mega corporations to continue doing what they do best, rake in enormous profits at the expense of hard working Americans! Is it true that their profits increase by not providing the care many of their policyholders need? The fact that Congress is passing legislation which is not in the best interest of Americans or America is indicative of the real changes needed to restore the people of this once great country as the primary focus which it’s elected officials should be working for. The notion that this industry is using part of the outrageous profits it has extracted from the public to bribe members of a government body whose purpose is to provide for the public good is sickening enough. Add to that the ease with which so many members, who swore an oath to protect and defend even before their own safety, so readily throw their electorate under the buss. HR 636 is the bill the public is demanding and those who vote against the public now had better have their next job lined up. It is high time we boot the blue dogs, the republicons and the other Benidict Arnolds out of politics and start voting in members of the working community, real Americans.
July 17th, 2009 at 2:20 am