Modified Wyden Free Choice Amendment

Sen. Wyden has modified his free choice amendment....short version is that persons who could show employer arranged insurance that cost between 8-10% of income would be allowed to shop for insurance in the exchanges. CBO estimates 1 Million extra insured at cost of $5 Billion over 10. This would be a good amendment to the Senate bill, and would begin to open up the exchanges to more persons.

Today's News and Observer Column

Focuses on the inclusion of the pared-back public option....public option light that was included in the Senate bill. I had to write the column by Wednesday before Senate bill text was out....then yesterday the House bill text did come out.

Both in include a public option that requires the govt insurance plan to set up networks and negotiate rates. The CBO says the House version will sign up 6 Million folks. Today there are 160 Million with employer provided insurance. The Senate version is likely to be similar and has an opt out provision, so if some states opt out, even fewer would be covered by the public option.

I am sure that public option will get much press and debate, but it is not the most important issue.

CBO Assessment of House Bill

House releases its reform bill today, here is the CBO assessment of it. Haven't looked at it or the bill closely.....spent most of the day driving to Charlottesville, Va. and giving a lecture. But, big picture is covers 36 Million uninsured (96% cover of legal residents), has total outlays of just under $900 Billion, reduces deficit by $104 Billion, financing via cuts to planned Medicare funding of around $400 Billion, and income tax increase for those with incomes of $500,000 for individuals and $1Million for couples. Has public option (no opt out) but doesn't use Medicare payment rates....has full negotiation of rates. Also includes the CLASS act provisions which are a long term care plan that comes from Senate HELP bill.

Here is full text of bill if you are bored.....weekend reading.

This will be a fairly weak public option....lots of fighting about it, but it is not going to be that consequential I don't think. CBO says that 6 Million folks will sign up....out of 307 Million Americans....not exactly a crushing defeat of the private insurance industry.

CBO says this about house public option.

Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.

That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)

Pubic Option Light

is the word in the House as well. Speaker Pelosi will unveil the House bill tomorrow that will have a public option, but one that will negotiate rates with providers instead of tagging payment rates to Medicare payment rates. This won't save much money, and it is not really clear that such a public option will be able to develop reasonable networks, and negotiate successfully in a way that lets them compete with private insurers. So, public option is in the House and Senate bills, but they are both mostly symbolic and won't do much. There will be great hyperventilaltion on both sides over this.....but both sides will be overstating the importance of THIS version of public option. Much ado about nothing, I think.

Also, the real action is going to be between the House income tax increase (on individuals %500,000+, families $1Million and up) v. Senate tax on high cost health insurance.

Tax on high cost health insurance is far preferable, because it will have some hope of controlling health care costs, and is at least a beginning to getting rid of the tax exclusion of employer provided insurance. I wrote about that last week. Wrote a few weeks ago in the Philly Inquirer a bit more about trying to improve the cost saving aspects of reform bills under consideration.

BCBS NC

News and Observer today has a piece on pushback to Blue Cross Blue Shield NC's mailer opposed to a public option here. I blogged about this last weekend. Hint: I suspect there are parts of NC that would be swayed by these types of mailings, but save your postage to Durham and Chapel Hill. I have been surprised by how many folks I have heard talking about this in the circles in which I run....which are the only ones I have direct knowledge about.

Also, some seem to be suggesting and are mad that BCBS NC used enrollee records to target the mailers, but I got the mailer and I don't have any BCBS insurance (nor does my wife). It is a general mailing, and mine is addressed to The Taylor Family or current resident.

Plus, so what if they want to mail to their customers advocating their position? Seems fine to me. Also, from the other side, if they mail it and it backfires on them by making folks angry, no one to blame but yourself.

Adam Searing has an op-ed in today's N and O on the history of BCBS NC, and how he feels the current form is not true to its history.

Ignani and Tauzin

Interesting story about Billy Tauzin, chief lobbyist for pharmacetical industry and Karen Ignani, chief lobbyist for health insurance industry.

Rep. Jim Cooper of Tennessee sums up big picture of the reform deals with these two groups over the summer: “The basic deal for these two industries, and others, is that they promised to behave if they get 40 million new customers. But now they are seeing they might not get as many new customers, and they are wondering if they still have to behave.”

Public Option

Sen. Harry Reid's decision to include a public insurance option in the merged Senate health bill is the story of the week, no doubt. Lots of angst and excitement. And Sen. Lieberman must be feeling neglected, but he has managed to make himself the center of attention. Earlier today he said he would vote to support a filibuster....and it wasn't clear if he meant a filibuster for a procedural motion to start the debate, or if he meant he would do so if it remained in after debate and amendments were done. Seems like the latter, that he will vote to start debate, but says he will vote to filibuster final passage if public option stays in. Of course, this is a good way to get yourself lots of power.

It seems there are several possibilities/
1. Reid thinks it is the best thing and is willing to take a chance for public option.
2. Reid knows it will go down, but needs to placate liberals. Bring it up, it goes down, modify the bill and then move ahead. Who knows maybe they bring it up, Repubs filibuster and get it out of their system say the Dems are destroying western culture as we know it etc etc and Dems say they are Neanderthals and later pass bill without it.
3. This is part of a House/Senate compromise that is designed to hopefully get the House to accept tax on health insurance plans (Senate approach) than the income tax increase financing mechanism in House bills.
4. This is a mistake.

I think med malpractice reform coming in is only way for the public option to have any chance. There are some rumours of a 'surprise' being in the Senate bill (I haven't seen text anywhere?) and perhaps this is medical malpractice reform. Especially given CBOs recent scoring of package of national reforms that have been tried in some states to reduce deficit by $51 Billion over 10 years.

Also, the funniest thing about all this is that the 'level playing field' public option in which govt insurance negotiates rates will most likely not be that successful. Savings would come from Medicare rates or Medicare + 5% or something like that....both sides are greatly over stating the actual effect of the type of public option that seems to be under consideration.