- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Twenty Questions on Reid's Opt Out Plan

Posted By Edmund Haislmaier On October 28, 2009 @ 9:57 am In Obamacare | Comments Disabled

Senate Majority Leader Harry Reid (D-NV) announced that he would bring to the Senate floor a bill that includes a new “public plan,” but with a provision allowing states to “opt-out.” In response to a reporter’s question, Reid said that states would have until 2014 to opt-out.

Setting aside the debate over the merits of a “public option”,- a new government-run health plan to compete against private health plans- there are a number of additional questions about how such a state opt-out would work. Specifically:

  1. What process will a state have to follow if it wants to opt-out of the public plan?
  2. Will opting-out require an affirmative vote of the state’s legislature?
  3. Will an opt-out resolution approved by a state’s legislature need to also be approved by the state’s governor?
  4. In some states the legislature meets in a full-session only every other year. In keeping with the allowances given such states by Congress when it has enacted federal laws that required state action, will those states be given additional time beyond 2014 to decide if they want to opt-out?
  5. Can a state decision to opt-out be made through a ballot initiative or referendum?
  6. If the start date of the public plan is delayed — say, because of unanticipated implementation problems — will the deadline for state decisions be extended beyond 2014?
  7. If, after implementation, the government-run plan does not work well in a particular state — say, it has only limited provider participation or has high, Medicare level, rates of fraud — will the state have a second chance to opt out?
  8. If a state opts out, and wants to increase coverage and intensify competition through its own health insurance market reforms that it deems superior, will it be able to do so?
  9. What conditions will the federal government impose on a state that decides to opt-out?
  10. If a state chooses to opt-out of the public plan, will the federal government require it to establish or participate in an alternative arrangement or program? If so, what alternatives will the state be allowed to choose among?
  11. If a state permits the new government-run plan to operate within its boundaries, will the plan be subject to the state’s insurance laws, particularly those governing reserve requirements, solvency standards, rate reviews (to ensure premiums are sufficient to cover expected claims), market conduct (fair sales and marketing practices), or state rules governing coordination of benefits, subrogation of claims, third party liabilities, and Medicaid as payer of last resort?
  12. Will states have the authority to require the public plan to participate in state quality and transparency initiatives such as all-payer claims databases, health care price disclosure systems, health plan performance rating methodologies, state health IT standards, etc?
  13. Will the specific benefits and limitations of the government plan, including any coverage limitations, drug formularies or prior authorization requirements be finalized before a state must decide whether it wants to opt in or out?
  14. If provider participation in the plan is voluntary, will the list of participating providers in each state be publicly available before the state makes its decision?
  15. Will a state lose any direct federal funding if it decides to opt-out? If so, how much?
  16. Will a state’s residents lose eligibility for federal subsidies or tax benefits if the state opts-out? If so, which ones?
  17. What if a state initially opts out but then wants in later (after 2014), will it then be allowed to opt-in?
  18. If a state opts out of the public plan, will the citizens of that state still be required to pay the requisite federal taxes that would subsidize the citizens of other states?
  19. Why won’t a state be allowed to opt-out after 2014?
  20. Besides the public plan, what other provisions of the legislation will a state be able to opt-out of? The Medicaid expansion? The new federal insurance regulations?

Co-authored by Dennis Smith.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/10/28/twenty-questions-on-reids-opt-out-plan/

Copyright © 2011 The Heritage Foundation. All rights reserved.