Posts Tagged ‘public option’
In the News
July 29, 2010Another Public Option? How Many Do We Need?
The public option has reared its head once again. Last week, H.R. 5808 was introduced in the House Ways and Means Committee to add a public option to the Patient Protection and Affordable Care Act (PPACA).
The plan would be administered by the Secretary of Health and Human Services. Payment rates for providers would be set at Medicare rates plus 5 percent and would grow according to increasing physicians’ costs. The plan would be required to maintain solvency, so premiums would have to cover benefits offered and administrative costs.
Momentarily setting aside the major drawbacks of a public plan, this legislation isn’t necessary—the PPACA already lays the groundwork for a robust public option. The new law will allow the Office of Personnel Management (OPM), which currently oversees federal employees’ health benefits, to administer plans in the exchanges. These plans would be offered by private insurers but run by unelected government officials. (more…)
Tags: limited choice, Medicaid, Medicare, Office of Personnel Management, public option
In the News
July 27, 2010New Bill Not Necessary: Public Option Already in Obamacare
Like many federal efforts in Washington, last week’s reintroduction from House Democrats to create a public health insurance option, which would become part of the 2014 insurance exchanges created by Obamacare, is a bureaucratic redundancy. Stuart Butler points out that the health reform law already has its own “public option” through expanded powers to the Office of Personnel Management (OPM).
Calling the House bill a “smokescreen” for the nation’s opposition against a public option, Butler says the real story is in the “OPM alternative.” “Far from being an alternative, it is the fast road to a public plan — as I warned before the legislation passed. Why? Because the ‘alternative’ gives the OPM the power to establish national plans. These are to be private — but in name only.”
With “enormous reserve powers,” the federal government would be able to set premiums that would drive other private health insurers out of the market, leaving Americans with no choice but to enroll in the government-mandated health plan.
Tags: health insurance premiums, ObamaCare, Office of Personnel Management, private insurers, public option
In the News
July 7, 2010Battle Over Health Care Reform Has Only Just Begun
Before passage of the president’s health care legislation in March, House Speaker Nancy Pelosi (D-CA) infamously exclaimed that “we have to pass the bill so that you can find out what is in it.” It has now been months since the Patient Protection and Affordable Care Act became law, and as Heritage expert Stuart Butler explains in a recent paper, the consequences of the bill remain to be determined. Moreover, the ambiguity of the legislation and the amount of decision-making left to administrators means that several controversial questions surrounding the legislation remain unanswered.
Butler highlights the following areas as those in which Americans may find that critical future decisions could drastically change the direction of the health care overhaul: (more…)
Tags: employer-sponsored insurance, health care debate, health exchanges, House Speaker Nancy Pelosi, ObamaCare, public option, repeal, start over
In the News
April 6, 2010The Long War of Repealing Obamacare
In the depressing aftermath of Congress’s passage of the Democratic health-care legislation, there has been an understandable temptation among conservatives to think that all their effort over the last year to derail what was coming down the tracks may have been for naught. After all, the bill did pass. The president and his allies got their signing ceremony and their victory lap, as well as a barrage of premature but predictable pronouncements from the national media that we are now witnessing a historic moment of irreversible liberal progress.
And there’s no use sugarcoating what has happened. It’s a debacle from every possible vantage point. The Democrats have created another massive entitlement program while expanding federal power and reach in a manner not seen since the heyday of Franklin D. Roosevelt. If allowed to stand, the new health-care law will tether America’s middle class to the federal government in ways that will fundamentally alter — and not for the better — the relationship between citizens and the state. The result will be worse health care, distorted politics, less medical innovation and economic vitality, and depleted wealth.
Tags: $1.2 trillion cost, conservative opposition, doctor-patient relationship, massive entitlement program, Medicaid Expansion, Medicare cuts, ObamaCare, Public Opinion, public option, repeal
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
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