Posts Tagged ‘public option’
In the News
March 9, 2010What the House Would Have to Swallow in the Senate Bill
Amidst all the intense speculation about quickly passing the President’s health care agenda through the Budget Reconciliation process before the Easter Recess, ordinary Americans should remember one thing: the House of Representatives must first pass the 2,700-page, $2.5 trillion, Senate health bill. So, the next big step in the national health care debate is floor action in the House of Representatives, where House Speaker Nancy Pelosi must round up at least 216 votes.
Heritage analysts have conducted some extensive research and analysis of the provisions of the giant Senate bill. If the House passes the Senate bill and it goes to the President’s desk for signature, it then would become the law of the land. For all intents and purposes, the legislative debate would then be over.
Regardless of Administration or Senate leadership promises to “fix” the new law (the Senate bill) through the Budget Reconciliation process, there are no guarantees. Any “fixes”– if they did come about — would have to survive another round of Senate floor action. So it is worth recalling what the Senate bill would mean for Americans were it to become law. (more…)
Tags: Cornhusker Kickback, House Speaker Nancy Pelosi, Individual Mandate, Office of Personnel Management, President's proposal, public option, Senate Health Bill
In the News
February 4, 2010The Public Option Threat Still Buried in the Senate Bill
Most Americans now believe that major health care legislation will not pass this year. But as Heritage Vice President Stuart Butler explains in The New England Journal Medicine one seemingly minor proposal in the Senate health care bill could end up having huge repercussions for our entire health care system:
“The Senate legislation contains strong directives to the OPM, requiring it to negotiate medical-loss ratios (the percentage of premiums that insurers actually spend on medical care for enrollees), minimum benefits, profit margins, premiums, and “such other terms and conditions of coverage as are in the interests of enrollees in such plans.” Crucially, the legislation also specifies that the OPM-administered plans would automatically be deemed to meet all the requirements for plans to be offered through the health exchanges created by the legislation.1 This means that OPM-administered plans could in practice operate free of many of the financial regulations that exchanges might impose on other plans, allowing the plans to operate under their own OPM-designed regulations.” (more…)
Tags: New England Journal of Medicine, OPM, public option, Senate Bill, Stuart Butler
In the News
January 25, 2010OPM: The Public Option in Disguise
In order to secure the votes to pass a health care bill, Senate Democrats were forced to scrap the widely unpopular public option. But before chalking this up as a victory for opponents of government-run health care, though, its replacement deserves a closer look. As described in Sec 1334 of the Senate bill, the Director of the Office for Personnel Management (OPM) would now be charged with sponsoring a set of multi-state health plans to compete with private insurers. As a recently published detailed analysis by Heritage’s Bob Moffit and Kathryn Nix shows, this new program is simply a placeholder for the public option.
On January 20, The Heritage Foundation hosted three former OPM directors to explore the ramifications of the new proposal. Former Director Linda Springer opened by questioning the role of OPM in the proposal. OPM currently administers the successful Federal Employee Health Benefits Program, and it is due to this expertise that the agency was chosen to run the new multi-state plans. However, Springer warned that overstretching OPM beyond its traditional role could result in the cannibalization of the existing FEHB program.
Tags: Federal Employee Health Benefits Program, OPM, public option
In the News
January 19, 2010Sen. Nelson Says “No” to Public Option A Bit Too Late
In the wake of widespread public backlash over his eleventh-hour deal to get increased federal taxpayer Medicaid funding for his vote, Sen. Ben Nelson (D-Neb.) has been hitting the media circuit, assuring reporters that he won’t vote for any merged health care bill that funds abortions with taxpayer dollars or has a government-run health insurance plan.
“There is zero chance (of a public option),” he said to The Chadron Record. “I’ve made it so clear. It isn’t going to happen.” But Sen. Nelson has already allowed a “public option” to flourish by voting for the Senate version last month.
Medicare, for example, is the quintessential public plan. Instead of the Medicare bureaucracy contracting with private carriers to provide health coverage, as it does today, the latest Senate bill turns that responsibility over to the Office of Personnel Management (OPM), the agency that runs the federal civil service and the popular Federal Employees Health Benefits Program (FEBHP). Under the Senate bill, OPM would sponsor two “multi-state” health plans —one of which must be nonprofit — to compete against private plans in the country.
In other words, there could be health plan competition on a national level in every state, but only the federal government would field these national health plans. These government-sponsored health plans would have an exclusive franchise: No private health plans would be able to compete in the same way as the selected health plans sponsored by OPM. In effect, the Senate bill creates a set of “public options” that are thinly disguised as private health plans.
Tags: FEBHP, Medicare, Office of Personnel Management, public option, Sen. Ben Nelson
Latest Research
January 12, 2010Don’t Draft OPM Into Fight for Government-Run Health Care
In the ongoing attempts of Congress to find an alternative to the “public plan” in health reform, the Senate bill includes a provision to give the Office of Personnel Management (OPM), which oversees the Federal Employee Health Benefit Program (FEHBP) a new role: sponsoring health plans to compete against private health plans in every state in the nation. Heritage expert Ed Haislmaier has studied the provisions responsible for this new role for OPM, and finds that OPM’s new power would go well beyond its current capacity and allow for the creation of a de facto public option.
As Kay Cole James, a former director of OPM, points out the FEHBP works because OPM plays the neutral role of an umpire: federal employees choose the private plan they like from a wide variety of different plans, all of which compete against each other to attract the most enrollees. The federal government provides its employees with a defined contribution towards their health costs, and it doesn’t micromanage their choices. OPM allows variety and flexibility in the program, and limits its regulatory role to ensuring consumer protections. Majority Leader Harry Reid’s (D-NV) proposal would have OPM sponsor new multi-state plans. OPM would set the premiums for plans it sponsors.
This new role for OPM is the Senate alternative to the House passed “public option”. But ordinary Americans should be leery of the difference. According to James, “this arrangement seems to be a “public option” in “private” option disguise… Because OPM would not merely serve as the umpire overseeing competition among private health plans. It would also become a health-plan sponsor, fielding its own team of players to compete against the existing private plans in every state.”
Given this new role, OPM could engineer a crowd out other private insurers in the market. Furthermore, Section 1334 of the Senate health care bill allocates “such sums as may be necessary to carry out this section”. If the OPM-sponsored health plans were not profitable, it is thus conceivable that the taxpayer could end up footing the bill. This, along with the federal power to set rates and benefits, could easily end up as the public option that Senate liberals envisioned all along.
Says James, “OPM’s job is to serve the federal civilian work force and its retirees, while enforcing merit principles in hiring and stopping prohibited personnel practices. It’s not OPM’s job to compete against private health plans.” The best features of the FEHBP- broad consumer choice and intense Multi-plan competition, free of heavy regulation and massive bureaucracy, and governed by approximately 80 pages of statutory text- are worthy of replication. Giving OPM the power to sponsor “multi-state” health plans in competition against the private sector is not the same thing.
Tags: Federal Employee Health Benefit Prgram, government-run health care, Office of Personnel Management, public option
Latest Research
January 12, 2010Making a Bad Bill Worse
The Washington Post’s EJ Dionne’s had an op-ed yesterday detailing six policy areas where House Democrats believes they can pull the Senate health care bill further to the left. For every issue that Dionne identifies, a House victory would lead America even further down the path to government run medicine:
1. A National Health Insurance Exchange
A national exchange would create a vehicle for federal regulation of insurance policies and one-size-fits-all health plans that don’t necessarily meet the needs of all Americans. This threatens the federalist division of power between the national government and the states, and undermines the capacity of the states to function in this vital area of public policy. A national exchange would also pre-empt the states in pursuing their own efforts to expand coverage, or, for those states that would like to experiment with an exchange, it would encroach on the states’ abilities to tailor their state-based exchanges to their specific needs. A health insurance exchange, unfortunately, can mean many different things, from a facilitator of consumer choice and open competition to a restriction on both. For those interested in the concept, states based insurance exchanges have to be done right. Simply having the states administer a federal exchange makes matters worse, by hampering or even killing off state innovation.
2. Higher Subsidies for Exchange Enrollees
Offering higher subsidies to the few who are able to join the exchange will heighten the effect of the inequity among workers created by the Senate bill. This change would also add billions to the cost of the bill at the same time that other changes would lower revenue. This increases the likelihood that billions of dollars spent on health care reform will be added to the federal deficit.
3. Further Expansion of Medicaid
Both bills already significantly expand Medicaid eligibility. If the negotiations result in the raising Medicaid eligibility to 150 percent of the federal poverty level (FPL), as the House bill does, the Office of the Actuary estimates that TK million uninsured Americans would gain coverage through Medicaid. Anytime there is a public program expansion, one is going to see a “crowd-out” of private health coverage. Americans should not be fooled—the real story is these bills would expand coverage by putting millions of Americans into Medicaid, one of the country’s most poorly functioning health care programs. In that sense, contrary to false rhetoric by Congressional champions, both bills are a deliberate prescription for lower quality of care for millions of Americans.
4. A Weaker Excise Tax on High-Cost “Cadillac” Insurance Plans
To pay for the proposal, both bills depend on raising taxes to help pay for its trillion dollar “reforms.” The President has indicated he supports the Senate version, which would impose a new excise tax on so-called “Cadillac” plans. There is great opposition to the tax among unions, whose members, overwhelmingly middle class, tend to enroll in such plans. But, getting rid of the excise tax all together is not an option since it would have to be replaced with another revenue raiser; higher taxes somewhere else. Negotiations could end up creating more special interest exemptions – this time for unions – and leaving the non-union workers with “Cadillac Plans” to foot more of the bill. Look for new inequities being piled upon the variety of inequities already created by the House and Senate legislation.
5. The Ugly Nelson Deal: More Cost-Shifting All Around
Politicians, eager for “free” federal taxpayers money, are now looking to secure the same sweetheart deal for their states that Senator Ben Nelson (D-NE) got for Nebraska. Called the “Cornhusker Kickback”, in the Senate bill, Nebraska’s Medicaid expansion would be paid for with federal taxpayer dollars. Under the Nelson-Reid agreement, the federal government would fully fund the expansion of Medicaid in Nebraska. Extending this deal to all 50 states would superficially appeal only to those state taxpayers who don’t share the sense of national embarrassment that stirs the massive opposition of the straight shooting, good hearted, solid folks in Nebraska. But of course, such a “deal” would only sharply increase the federal cost of the bill, shifting these costs back to state taxpayers as federal taxpayers instead. In an absurd process, taxpayers would see the costs shifted right back to themselves by the politicians promising something for nothing. Furthermore, if and when, if ever, the federal Medicaid matching rate expires, state taxpayers would be forced to make up the difference in funding on their own, forcing them to either cut funding to other programs or raise taxes, yet again.
6. More Micromanagement of Health Insurance
Both bills already transfer massive regulatory authority over health insurance plans to the federal government. Negotiations will likely add additional control to regulate and oversee the management of insurance companies. This could include increasing the medical loss ratio, removing antitrust exemption for insurance companies, more stringent age rating for premiums, and a heightened ability of the Department of Health and Human Services (HHS) to review premium increases. All of these regulatory schemes would stifle consumer choice in the insurance market, undercut real market competition, and result in a government-run health care system, with or without the public option.
More and more, it seems that members of Congress are less interested in enacting meaningful change to the health care system that Americans actually want; and they are more concerned with getting the right number of votes for something, anything, that they can somehow call “reform”, even though the vast majority of Americans vehemently disapprove of what they are doing.
Tags: Ben Nelson, Cadillac Plans, Cornhusker Kickback, E.J. Dionne, government-run health care, Medicaid, national exchange, Obama Health Care Plan, public option
In the News
December 22, 2009Beating Up Lieberman Is Cover-Up for Lefts Problems
The Left is lost without a villain. You can’t have victims without one. To maintain its cult of victimology, the Left must identify (or create) bad guys. Hence, according to the narrative from the Left:
– Our economy struggles because fat cat bankers are selfish and George W. Bush left Barack Obama a mess.
– Health care is expensive because insurance companies are greedy.
– And we cannot enter health-reform paradise because Joe Lieberman is blocking the doorway.
The Democrats’ choice for Vice President in 2000, Sen. Lieberman (I, CT) is now Public Enemy Number One to the Left. Heaping blame on him is also a convenient way to hide the divisions among Democrats, including several other Democrat Senators who did as much as Lieberman to quash the most recent version of health care legislation. It’s easier to scapegoat a villain than to admit your ideas fail because they’re flawed. The Left prefers to drop someone from hero to zero than to acknowledge that liberals have overreached. (more…)
Tags: public option, Sen. Joseph Lieberman, Senate Majority Leader Harry Reid
In the News
December 15, 2009Obamacare Is The Public Option
According to recent reports, the Medicare buy-in compromise that Majority leader Reid (D-NV) and President Barack Obama heralded as the grand health care compromise just last week, is now dead. Sen. Joe Lieberman (I-CT) is being credited with killing Reid’s deal, and some are even suggesting that the entire idea of a public option is dead. But do not be fooled.
Through incremental expansions of government programs like the State Children’s Health Insurance (SCHIP) program the left has been slowly moving us closer to single payer government run health care system for decades. Obamacare will only accelerate that trend; the only question is how fast. You can’t take the public option out of Obamacare. Obamacare is a public plan. Here are five reasons why:
1. Obamacare Raises, Not Lowers, Health Care Costs. According to President’s own Centers for Medicare and Medicaid Services, the agency in charge of running Medicare and Medicaid, both the House and Senate health bills raise overall health care spending in the United States. The House bill would raise national health expenditures by $289 billion and the Senate bill would raise them by $234 billion. (more…)
Tags: government-run health care, Obama Health Care Plan, public option
In the News
December 7, 2009Johns Hopkins Medicine CEO: Obamacare Will Have “Catastrophic Effects” on Health-Care Safety-Net
Dean and CEO of Johns Hopkins Medicine Edward Miller writes in the Wall Street Journal:
“Both the House and Senate health-care reform bills call for a large increase in Medicaid—about 18 million more people will begin enrolling in Medicaid under the House bill starting in 2013, Centers for Medicare and Medicaid Services (CMS) Actuary Richard Foster estimates.
…
A flood of new patients will be seeking health services, many of whom have never seen a doctor on more than a sporadic basis. Some will also have multiple and costly chronic conditions. And almost all of them will come from poor or disadvantaged backgrounds.
…
We’ll meet the demands placed on us because serving poor and disadvantaged populations is part of our century-old mission. But without an understanding by policy makers of what a large Medicaid expansion actually means, and without delivery-system reform and adequate risk-adjusted reimbursement the current health-care legislation will have catastrophic effects on those of us who provide society’s health-care safety-net. In time, those effects will be felt by all of us.”
Read Miller’s entire op-ed here.
Abortion, the public option, and the individual and employer mandates are all important issues in the health care debate. But Miller’s op-ed reminds us that not enough attention has been paid to the fact that in both the House and Senate bills almost half of all new insurance coverage gained through “reform” is accomplished through expansion of Medicaid eligibility requirements. The only reason Medicaid carries such a heavy load under Obamacare is because the Congressional Budget Office scores it as an inexpensive way too expand health insurance coverage. Go here to see a large, printable PDF of Heritage’s Medicaid expansion chart.
Tags: abortion, mandates, Medicaid, public option, Wall Street Journal
In the News
November 19, 2009The Five Flaws of the Reid Health Bill
We’re still pouring over Majority Leader Harry Reid’s (D-NV) just released health care overhaul, but the major outlines of the bill are no different than the policy train wreck the House passed earlier this month.
The five major flaws of both the Pelosi and Reid Bills are:
1. A New Public Plan. Both the House and Senate bills would create a new government-run health care plan — a so-called public plan — intended to “compete” with private insurers in a new health insurance exchange. The result: widespread erosion of private insurance and substantial consolidation of federal control over health care through the exchange. Congress is incapable of guaranteeing the American people a level playing field for competition between the government plans and private health plans. As the Centers for Medicare and Medicaid Services has recently certified, what many have already concluded, millions of Americans will lose their existing employer-based coverage. (more…)
Tags: double digit unemployment, employer mandates, individual mandates, Medicaid, Obama Health Care Plan, public option, trillion dollar deficits
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