Is a Public Option Plan Over?

After back and forth negotiations, Senate Democrats came to a consensus on Tuesday and agreed to drop the government-run public option plan from the proposed health care bill. This came after five liberal and five moderate Democrats negotiated the terms of the bill behind closed doors over the past several days.

Instead of a health plan run by the federal government with a state opt-out provision, that would supposedly increase competition amongst private insurers, the modified legislation would contract with private insurers to offer a national health plan to the uninsured through the health care exchange. The Office of Personnel Management (OPM), the same organization that runs the Federal Employees Health Benefits (FEHB) program, would oversee the program and give accreditation to plans set up through private insurers. Similar to the FEHB, plan benefits and premium costs would be negotiated beforehand. The idea is that uninsured individuals who purchase this coverage would have several plans to choose from.

The new language also expands Medicare coverage so individuals between the ages of 55 to 64 who have difficulty obtaining coverage can qualify. Those in this age bracket who receive health care coverage through their employer would continue to do so. For those that would qualify, Medicare coverage would be available at subsidized rates, though still at a higher rate than those over age 65.

This compromise alleviates moderate Democrat concerns over the government’s growing involvement in the private market. However, it does not lessen the worries of the American Medical Association, who opposes expanded Medicare coverage. Steep payment cuts to doctors and hospitals proposed in this bill will affect already low reimbursement rates offered through the Medicare program.

Another key issue is abortion funding. An amendment proposing that no federal funds are used to help women get abortions was voted down 54-45.

In addition to extending coverage, this bill has plenty of other provisions:
• Create new tax subsidies for low- and middle-income people required to purchase coverage.
• Prohibit private insurers from denying coverage for pre-existing conditions.
• Insurance companies would be required to spend no less than 90 percent of insurance premiums received on health care services, limiting their profit.
• Expand Medicaid to cover people with incomes up to 150 percent of the poverty level
• Extend Children’s Health Insurance Program from 2013 to 2015 to provide coverage for children from low-income families.

This revised plan is a long way from what President Obama has urged Congress to pass. With Republican and moderate Democrat opposition, liberal Democrats have begun to realize that a public option plan is unlikely to pass in its initial proposed state. With all the changes, it remains to be seen if the negotiated legislation has the 60 votes needed to pass through the Senate next week.