Moving In The Right Direction

Despite the AP inflating the cost of the House health care bill based on the words of an anonymous staffer rather than the CBO score, the bill would actually cost $1 trillion dollars over 10 years, which is $100 billion per year, far less than the money lost from, say, the Bush tax cuts. And since the bill is paid for through internal cost reforms and, in the House bill, a surtax on the wealthy, it won't cost the federal government one cent. Igor Volsky has a good look at the overall benefits of the bill.

As far as the public option is concerned, Walker has the good news and bad news.

*The public option will be available nationwide and from “day one” on the new national health insurance exchange.

*The public plan will be run by the Department of Health and Human Services.

*The public option will pay doctors the same rates as Medicare plus 5% for the first three years.

*The public option will have the power to directly negotiate drugs prices.

*Roughly a third of all people buying health insurance through the exchange are projected to select the public plan (around 11 to 12 million). This is not a high enough percentage that the public plan will “dominate” the exchange. Incredibly important!

*The public option's premiums will be 10% cheaper than a typical private insurance plans.

*The public plan will drive down the cost of overall reform. The size of subsidies will be based on the cost of the three cheapest plans. By offering a cheaper public plan, the size of subsidies are reduced.

*The public plan will self-sufficient and not increase the federal debt.

The Bad News

*The public plan will not be available until 2013. The Health Insurance Exchange will not start until 2013, so no one can purchase the public plan until then.

*The public option will only pay Medicare rates for the first three years. After that it will need to negotiate its own.

*Medicare providers are not required to accept the public plan. (On the positive side: providers that are part of Medicare's network will be part of the public plan's network unless they opt-out.)

*Large businesses will not be allowed to choose the public plan. It is only available to individuals and small businesses getting coverage through the exchange.

*Only 30 million Americans will be able to select the public plan because of the above restriction. (On the positive side: starting in 2016, the Commissioner might allow some larger employers to give their employees insurance through the exchange)

*The public plan's power to negotiate drug/service prices will weaken because of restrictions which strongly limit the number of Americans who can choose to sign up for it.

Because the employer-based system is sustained in this reform, far less people can be eligible for the public option, which I don't like. But I agree with Walker that getting the option in place is the heavy lift - expanding access, especially if it's successful, will be easier politically. Furthermore, with only 10 million - 3-4% of the population - likely to enroll in the public option, the private insurance market, which will stand to GAIN customers through the individual mandate, is not really negatively impacted by it in the opening 10 years. And it will save money for the federal government, individuals and businesses.

President Obama addressed skeptics of health care reform in the Rose Garden today:

I know a lot of Americans who are satisfied with their health care right now are wondering what reform would mean for them. Let me be clear: If you like your doctor or health care provider, you can keep them. If you like your health care plan, you can keep that too.

But here's what else reform will mean for you: you'll save money. If you lose your job, change your job, or start a new business, you'll still be able to find quality health insurance you can afford. If you have a preexisting medical condition, no insurance company will be able to deny you coverage. You won't have to worry about being priced out of the market. You won't have to worry about one illness leading your family into financial ruin. That's what reform means.

The naysayers and the cynics still doubt we can do this. But it wasn't too long ago that those same naysayers doubted that we'd be able to make real progress on health care reform. And thanks to the work of key committees in Congress, we are now closer to the goal of health reform than we have ever been [...]

Both proposals will take what's best about our system today and make it the basis of our system tomorrow - reducing costs, raising quality, and ensuring fair treatment of consumers by the insurance industry. Both include a health insurance exchange, a marketplace that will allow families and small businesses to compare prices, services and quality so they can choose the plan that best suits their needs; and among the choices available would be a public health insurance option that would make health care more affordable by increasing competition, providing more choices, and keeping insurance companies honest. Both proposals will offer stability and security to Americans who have coverage today, and affordable options for Americans who don't.

Late word today that the White House would consider using budget reconciliation to pass health care reform, which is more a threat to keep Republicans and conservative Democrats from getting locked out of the process. But if it works, all the better.

The full court press for health care reform is on.