Saturday, October 24, 2009

Premium inflation for small businesses and public option

Story in the NYTimes about very sharp increases in health insurance premiums for small businesses. During the 1993-94 reform discussion, premium increases moderated a bit....some felt as though there were attempts to slow premium growth as a way to thwart the need for reform. This story tells another story, more rapid premium increases ahead of anticipated reform, as the story calls it 'make hay while the sun is still shinning.'

And the WSJ has a story on House Dems (Speaker Pelosi and Whip Clyburn) being open to alternative public option proposals....namely that such a plan would negotiate rates with providers instead of simply paying some set increase over Medicare rates.

Public Option seems to be much in play and gaining large part because the polls that actually describe how a public plan would work tend to show support for it, and because adding a public option will lead to savings per CBO. It is also gaining in confusion....because you actually have to land the plane and pick one of the public option options. Public option still seems to be tied up with state opt out options. Also, yesterday Sens. Landrieu and Lieberman seemed to signal they would not filibuster a bill with a public option.

The various proposals:
(1) full public option which would be national plan, essentially allowing people to buy into Medicare, with payment rates set at Medicare rates. Others want Medicare payment rates plus 5% as a way to encourage docs to take the insurance.
(2) state based public option that would allow states to set up a public plan; by definition, the mechanism would differ by state. Some states could simply allow people to enroll in existing mechanisms like the state employees insurance scheme.
(3) national plan that negotiated payment rates like other insurers do.

Sen. Snowe has been in favor of a trigger option, meaning you would start withouot a public option and one would come about only if targets related to insurance cover rates and/or cost increases, and this would be state specific. She seems to be one of the few for this option, but the White House continues to show her great deference.

State opt out. This would say a state could have a public option or not at the state's discreation. The could be done with a national public option with some opting out, or could simply allow individual states to set up a plan.

I think this next week we will see some attempt to land the plane, and see a Senate and a House bill that will then move toward the floor. I think a big part of the back story is that as the Senate has moved toward some sort of public option, the Speaker has moved to back off the stronger public option because with none in the Senate, the House has to pass more to give it leverage in the conference committee/bill. But, if the Senate is going to pass one, the House is more likely to move toward that (incl. opt out) in an attempt to hold Dem moderates on board.

Also, I think a med mal component is still likely to jump into the mix late as a way to solidify moderate Dems.

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