The Wonk Room

Olympia Snowe: Trigger Is ‘Not On The Table And It Won’t Be’ In Senate Finance Bill

Earlier this month, the White House was building support for a scaled-back health care bill that would trigger a public health insurance option if private health insurers did not substantially reduce health care costs. Sen. Olympia Snowe (R-ME) — a member of the Senate Finance Committee and the so-called Gang-of-six tasked with producing a bipartisan health care bill — had floated the idea and was negotiating the option with the White House.

But this morning on CBS’s Face The Nation, Snowe suggested that a ‘trigger’ did not generate any bipartisan support. “It’s not on the table and it won’t be,” in the final Senate Finance Committee bill, Snowe said. “We’ll be using the co-op as an option at this point as a means for injecting competition in the process.”

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A trigger proposal would activate a public option into the Exchange if private insurers failed to lower premiums by X% over Y years and — if triggered — may lead to greater cost reductions than Sen. Kent Conrad’s (D-ND) proposal to establish a network of consumer driven health care cooperatives.

As Sen. Jay Rockefeller (D-WV) explained this morning on ABC’s This Week, “people talk about a cooperative plan. Health co-ops. And I called the head of the national association really early, and he said, it’s great on water, it’s great on farm, it’s great on electricity, etc, but it really doesn’t work on health care. There are fewer than 20 in the country and there are only two that really work. And one of them is in Washington, the other one is in Minneapolis, Minnesota. And both of these senators from Washington are voting for a public option. So it hasn’t had a future, it goes back to the 30s and 40s, and I don’t think you can take the chance. You have to start a national thing all the way up.”

Senate Finance Committee Chairman Max Baucus (D-MT) is expected to release the official draft of the committee’s bill on Wednesday. Most observers believe that it may be the only legislation that could pass the senate through regular procedure. On Fox News Sunday, however, Sen Orrin Hatch (R-UT) — also a member of the committee — said, “Even with all the work that I give my fellow senators credit for in the Finance Committee…I just do not believe that they’re going to have the Republican support on this type of approach.” Snowe refused to say if she would cast the lone Republican vote for the committee’s health legislation.

White House Scaling Down Health Reform Ahead Of Address

The White House is paring down health care reform ahead of the President’s prime time address on Wednesday. The overhaul would still include insurance regulations, “a requirement for most individuals to buy insurance; a federally operated exchange where individuals and small businesses could buy insurance; and tax credits to help people buy plans.” But the President’s new vision of reform would lower the price tag of reform by undercutting certain reform provisions.

White House sources are telling reporters that the administration will try to win-over conservative Democrats and some moderate Republicans by lowering subsidy levels, compromising on the public option, and taking out some of the more ‘politically controversial’ elements of reform. “It’s so important to get a deal,” a White House official told the New York Times, speaking on the condition of anonymity in order to be candid about strategy. “He will do almost anything it takes to get one”:

- To avoid some of the most heated criticism voiced in recent weeks, White House officials said they would have no objection if Congress scrapped proposals to have Medicare pay for counseling on end-of-life care.

- White House officials said Congress could also drop proposals requiring the government to create school-based health clinics and collect nationwide data on health and health care by race, sex, sexual orientation and “gender identity.”

- Another option, lawmakers said, is to attempt to make any package that comes to the Senate floor more attractive to Republicans by including tighter cost controls and slowing the pace of providing coverage to the 47 million Americans who have no insurance

- But comments from senior White House aides to POLITICO that the president does not plan to insist on a public option.

Meanwhile, Jonathan Cohn explains that extending affordable coverage to all Americans would cost somewhere in the neighborhood of $1.5 trillion “if done properly.” “Anything less and you have to start cutting back. You offer lower subsidies. You provide people with weaker, less protective insurance. You roll out changes over time.” Cohn believes that the administration is trying to lower the cost of the reform to around $700 billion, a number that would require very serious cut backs in subsidies and could potentially endanger the effectiveness of an individual mandate. “[Y]]ou’ll end up reducing them down to levels where large numbers of people still couldn’t afford insurance. And if people can’t afford insurance, you can’t make them buy it,” Cohn concludes.

In other words, at $700 billion, health reform becomes somewhat ineffectual or at best, incremental; it’s certainly not universal. At $700 billion, the final bill would likely include “the structural and regulatory changes around which universal coverage could eventually be built,” but it would further put off “the dream” of universal coverage and would likely do very little to lower long-term health care spending.

Ultimately, the President has a choice to make. He can either scale down reform — in an effort to please conservative Democrats and Olympia Snowe — and abandon good policy and his liberal base, or he can throw his support behind a robust reform plan and stake his entire presidency on seeing it pass.

CNN: White House Negotiating With Snowe Over A ‘Trigger Public Option’

CNN’s Ed Henry and Dana Bash are reporting that the White House is negotiating with Sen. Olympia Snowe (R-ME) — a member of the so-called Gang-of-six tasked with producing a bipartisan health care bill in the Senate Finance Committee — to pass a “scaled-back bill that would focus on insurance reforms that both sides could agree to, but would not have a full public option, instead, would have a so-called trigger.” The negotiations come in advance of the Presidsent’s September 9th address to a joint session of Congress, in which Obama is expected to lay out a specific vision for health care reform:

What we’re hearing that she’s talking about with White House staff is sort of a scaled-back bill that would focus on insurance reforms that both sides could agree to, but would not have a full public option, instead, would have a so-called trigger. What that means in layman’s terms is basically that the insurance companies would have a couple of years to make some dramatic changes. If they do not make those changes, then a public option would be triggered.

Watch it:

Indeed, a trigger proposal would establish certain benchmarks: if private insurers fail to lower premiums by X% over Y years, then a public plan would enter the Exchange. To convince private insurers of the threat of public competition and maximize the effectiveness of the mechanism, policy makers would begin designing a robust Medicare-like program almost immediately after passing health reform legislation.

The White House’s embrace of Snowe’s proposal signals that it has lost confidence in Sen. Kent Conrad’s (D-ND) co-op compromise, a development that could appease Congressional liberals weary of the co-ops’ ability to lower health care spending. Conservative Democrats may also support a compromise that gives private insurers one final opportunity to lower health care costs without government interference.

The White House hopes “that this would appease liberals by saying it’s not completely off the table. And the big hope is that this could bring along another moderate Republican, like maybe Susan Collins of Maine, some conservative Democrats, like Ben Nelson and Mary Landrieu in the Senate, who don’t want a public option, but would sort of potentially be open to a trigger like this,” Ed Henry said.

This morning, The New Republic’s Suzy Khimm reported that Snowe — a long-time supporter of fairly robust health insurance reforms — may also be willing to push-up the subsidy levels from 300 to 400% of the Federal Poverty Line, include large businesses in the Exchange (under the House bill, large businesses would not be able to enroll their employees in the Exchange until 2017), and do more to prohibit insurers from discriminating against older beneficiaries.