A Strong Public Option: The Community Health Insurance Option (HELP bill)

[ProSense]

A Strong Public Option

The Community Health Insurance Option

A strong majority of Americans believe that a strong public option is an important component of any health reform bill that keeps costs down, expands coverage, and offers American families a wide variety of affordable options. Backed by the government for the public good, not private profit, the HELP Committee’s public option – called the Community Health Insurance Option – will be a strong, effective national plan that provides Americans with a real alternative to traditional, for-profit insurance.

Summary:

• HHS-based plan: The Community Health Insurance Option would be run by the Department of Health and Human Services. The government would pay for the first three months of claims as a way to capitalize it; this would be a loan to be repaid over time. For the first two years and longer if necessary, this strong public option would also qualify for “risk corridor protections” which offset or reclaim excessive losses and gains which could result during the start-up period (identical to those in Medicare Part D). Subsequently, its premiums would be set to make it self sufficient. This would make the public health insurance option quickly available in all areas of the country.
  
  
• Plays by the same rules: The public option would be one of the Gateway choices. It would follow the same rules as private plans for defining benefits, protecting consumers, and setting premiums that are fair and based on local costs.
  
  
• Provider payments and participation:
  
  
  • Negotiated rates within limits: The payment rates paid by the public option would be no more than the local average private rates – but could be less. The Secretary would negotiate these rates.
    
    
  • Input from Advisory Councils: Each State would create a Council of provider and consumers to recommend strategies for quality improvement and affordability. States would share in the savings that result.
    
    
  • Purely voluntary: Health care providers would have the choice of participating in the public option; there would be no obligation to do so.

Why It Will Make Health Care Affordable

• Pooled purchasing power: This public option can pool the purchasing power of its enrollees nationwide to leverage lower prices to compete with private plans. Similar negotiation power has been used by states to get drug rebates in Medicaid beyond the statutory minimum. It has been used by large businesses to drive delivery system change. This negotiation would be backed by a ceiling of paying no more than average local rates.
  
  
• Flexibility and incentives to innovate: Unlike administered pricing, the negotiation for payment rates gives the Secretary the ability to quickly and aggressively promote payment policies that promote quality and best practices. In addition, the State Advisory Councils would tailor delivery system reform for the public option, with a financial bonus for success.
  
  
• Lower administrative overhead: The public option would not need to raise premiums to support shareholder profits, extensive marketing, and extra risk reserves required by require to protect enrollees from plan insolvency or mismanagement of funds.

[IndianaGreen]

1. 'Option' means Blue Cross Blue Shield

Decoding continued: “Option” means Blue Cross Blue Shield

The second major cause of confusion in Section 3106 is its use of four terms, all of them vague, to describe the insurance companies that will sell the “options.” The bill uses these four terms interchangeably: “community health insurance option,” “qualified carrier,” “qualified entity,” and “contracting administrator.”

A brief example: In subsection 1 of a section entitled “Start-up Fund,” the bill establishes a “Health Benefit Plan Start-up Fund … to provide loans for the initial operations of a community health insurance option.” But subsection 2 says loan money from this fund is supposed to go to “carriers,” and subsection 3 says it shall go to “contracting administrators.” (“Carriers” is a term Medicare just phased out after four decades of use. The term referred to insurance companies which processed claims from doctors. Medicare now uses the term “Medicare administrative contractors.” The HELP Committee’s bill writers no doubt meant to refer to “contracting administrators,” not “carriers.” As I indicated above, “contracting administrators” will look almost exactly like the MACs that now serve Medicare.) Finally, subsection 5 says the loans must be repaid by “the community health insurance option” (not carriers or contracting administrators).

The only reasonable interpretation of this goulash is that insurance companies known as “contracting administrators” will be put in charge of creating health insurance companies all over the country that will contain “community health insurance” in their titles.

This interpretation is confirmed by subsequent provisions in Section 3106. In a section entitled “Authority to contract,” the bill says the Secretary may “enter into a contract with a qualified entity” to perform the same duties MACs perform for Medicare, and once this contract has been signed the entity becomes “a contracting administrator.” (These contracts must last at least five years and may not last more than ten years.) In addition to meeting the MAC standards, contracting administrators have to be:

• non-profit;
• able “to offer a community health insurance option”;
• “eligible to offer health insurance” (I assume this strange phrasing means the insurance company is licensed in the state where it hopes to sell “options”);
• able to achieve “delivery of benefits”; and
• able to “promot high quality clinical care.”

The requirement that the contracting insurers be able to “promote high quality clinical care” is a tip-off that the HELP Committee wants the insurance companies that will run the “community options” to use managed care cost-control tactics. A second tip-off is that Section 3106 does not guarantee patients the right to choose their own clinic and hospital. Instead the bill only requires that a ”community” insurer will be one that “offers a wide choice of providers.” In short, an entity that meets the MAC standards plus the additional criteria in Section 3106 amounts to your basic, non-profit managed care insurance company. The big ones these days include many Blue Cross Blue Shield companies and the nonprofit HMOs such as Kaiser Permanente, Group Heath of Puget Sound, and HealthPartners.

http://pnhp.org/blog/2009/08/14/the-senate-help-committee-%e2%80%9cpublic-option%e2%80%9d-will-be-multiple-%e2%80%9coptions%e2%80%9d-and-these-will-be-run-by-insurance-companies/

[ProSense]

2. Only thing you have is spin, huh? n/t

[IndianaGreen]

3. You are the spinmeister in here

Makes me wonder if you work for the health care industry in some capacity.

[ProSense]

4. "Makes me wonder if you work for the health care industry in some capacity."

Is grasping at straws your way of saying you're losing the argument?

[IndianaGreen]

5. I hear this circular logic from some of the people in I/P forum

It is an old tactic.

[ProSense]

6. Accusing people of being paid shill is a sign you have no argument

In fact, you have no argument. You go back and forth proclaiming that the public option sucks to accusing Dems of trying to kill it.

[IndianaGreen]

7. Now you are using a strawman argument about the public option

Pathetic!

[ProSense]

8. Clue: the point was about you. n/t

[IndianaGreen]

12. Clue: the point is Section 3106 of HELP bill which debunks your propaganda

You want us to take a placebo for real medicine!

[paulk]

18. where have you countered his argument?

all you've done is insult

[CTLawGuy]

9. you have a lot of nerve calling people shills

when your very name suggests you are part of the Green Party and you spend all your time attacking Democrats.

[IndianaGreen]

11. You are totally incorrect, and had you been here back in 01

you would have known why I took the screename I did. Only a fool would confuse me with a Green Party member.

[CTLawGuy]

15. sorry for being fooled

I can't imagine who else would bash democrats as much as you do other than a Green Party member.

[IndianaGreen]

16. Consider what the German Greens did back a few years back.

as soon as they were offered a seat at the ministers' table, they quickly abandoned their Iraq antiwar stance and went along with the government they had just joined. How's that for a principled position?

[ipaint]

10. You are correct.

It is how the ins. companies will privatize the public option. I'm sure there will be much more info at the Physicians For National Health Program site in the next week.
For anyone looking for info about the history to the present of public health insurance here and around the world their expertise is unmatched.

http://www.pnhp.org/

[Raine1967]

13. Thank You. K&R

It is truly sad and pathetic that some people on this board would react the same way the Repubs do.

JUST THE SAME WAY.

(in that they shut down debate with strawmen and red herrings)

[demwing]

14. The author of this editorial writes

"Section 3106 is difficult to read. It fails to offer clear definitions of critical terms, it uses different terms to describe the same thing, and it contains unnecessarily abstract language. Because it is poorly written, it requires at least two readings to understand it. I will tell you first what I derive from it in the plainest language possible, and then discuss some of its provisions so you can judge for yourself whether I got it right."

In other words, he's unclear as to the ultimate meaning, and so, offers his interpretation.

Also, regarding the source data he uses for this interpretation, the author writes:

"... I have confirmed with two sources that there is no final bill available. An aide in the Washington office of Senator Al Franken (D-MN), with whom I spoke on August 7, referred me to the draft bill posted at the HELP Committee’s Website. At this Website, the draft bill appears in two pieces, one labeled “the Affordable Health Choices Act” and the other labeled “the additional Chairman’s mark on coverage.” It is in the “Chairman’s mark” segment of the bill, beginning at page 77, that we find “Section 3106: Community health insurance option.”

Let's look at the facts for a moment:

1. Dr. Dean supports the HELP bill
2. Dr. Dean and has a different interpretation than Kip Sulliva, the lawyer who wrote the piece.
3. Sullivan's interpretation is based on a draft bill, and no one knows whether the draft made it through the committee intact
4. Sullivan the lawyer isn't even sure if he's intrepreting correctly.

So why are we talking about this?

[John Q. Citizen]

19. If you read the CBO report on the bill you will see that their analysis is that the

public option won't sign up anyone because it will be just as expensive to join as private insurance.

If you read the entire analysis by Kip Sullivan, you will see that the bill doesn't provide for a true public option.
http://pnhp.org/blog/2009/08/14/the-senate-help-committee-%e2%80%9cpublic-option%e2%80%9d-will-be-multiple-%e2%80%9coptions%e2%80%9d-and-these-will-be-run-by-insurance-companies/


I know Kip Sullivan. I worked with him in Minneapolis at Minnesota COACT back in 1992. He's a good man and he's a nationally recognized expert on health care systems. He's been working on Health Care reform since the late 80's.

So that's why we are talking about this. Because this is the Bill that doesn't have a number yet that came out of the HELP Committee that you, me and KIP can't find the final draft to. The Congressional budget office did their analysis of the bill and they agree with Kip in terms of the financial impact and as far as how many people will be enrolled via the public option in this bill. That number would be zero.

Did you read the whole analysis by Kip? It's pretty thorough and it's straight. If Dr. Dean has published a detailed analysis of the bill I would love to see it. If he's just said that he thinks it's good, well, that's nice but it isn't an analysis.

[demwing]

20. Yes I read it

and I have to admit that Sullivan is an authority on health care. However, he begins the editorial by admitting that it was difficult for him to understand, that he does not have the final bill to review (yes, I'm aware that none of us do), and that his interpretation of the material may be wrong.

All I'm saying is that I agree with him - his interpretation may be wrong. The fact that Dean supports the HELP bill boldly underscores my concern.

[John Q. Citizen]

22. I'm wondering where any real analysis of the bills are. I would think that HCAN or SEIU or

DFA would be doing them with appropriate experts, but their seems to be a dearth of any in depth information coming out from those groups. PNHP seem to be the only group i can find doing real analysis of how the legislation will effect us.

The fact the HELP bill doesn't yet have a number and the fact that their is no definitions kind of raises some red flags for me. I mean, it's like they don't want the public to really analyze it or something. They are talking now about passing a bill before the end of the year. I wonder if they plan on letting us read and understand it first, or what.

What about the bill specifically does Dean like about it? or is his praise just generalized praise?

I did hear him speaking some where and he was using the CBO numbers for the HR3200 bill because me mentioned a public option that covered 10 million people. That would be less than a quarter of the uninsured and i guess none of any body else, so I imagine the plan is that the rest of us will be on private insurance for ever? Is that the plan?

[johnaries]

23. 'Scuse me, but what part of NON-PROFIT do you not understand?

:shrug:

[dflprincess]

17. "It would follow the same rules as private plans for defining benefits, protecting consumers"

It would "protect consumers" the way private plans do? This does not inspire confidence in me.

[Name removed]

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