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The Public Option Threat Still Buried in the Senate Bill

Posted By Conn Carroll On February 4, 2010 @ 3:45 pm In Obamacare | Comments Disabled

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Most Americans now believe that major health care legislation will not pass [2] this year. But as Heritage Vice President Stuart Butler explains in The New England Journal Medicine [3] one seemingly minor proposal in the Senate health care bill could end up having huge repercussions for our entire health care system:

The Senate legislation contains strong directives to the OPM, requiring it to negotiate medical-loss ratios (the percentage of premiums that insurers actually spend on medical care for enrollees), minimum benefits, profit margins, premiums, and “such other terms and conditions of coverage as are in the interests of enrollees in such plans.” Crucially, the legislation also specifies that the OPM-administered plans would automatically be deemed to meet all the requirements for plans to be offered through the health exchanges created by the legislation.1 This means that OPM-administered plans could in practice operate free of many of the financial regulations that exchanges might impose on other plans, allowing the plans to operate under their own OPM-designed regulations.

How might the health care system evolve if this OPM feature were implemented as part of a modest reform package? Congress rarely gives an agency powers that it does not intend to be used. It also seems reasonable to assume that the people appointed to administer the new bureau within the OPM will be more likely to embrace the adversarial and regulatory philosophy of the leading congressional reformers and the CMS than the traditional “hands-off” culture of the OPM. Managed by such a transformed agency, the private plans that were part of an OPM alternative would probably come, over time, to look more and more like third-party administrators of a federally designed competitor plan, operating under rules significantly different from those governing competing private plans. The result in a few years could be functionally indistinguishable from a public option.

Butler identifies another proposal seen in the House bill that also could spell the death of private health care. Read his whole article here [3].

More on the Senate’s OPM provisions, here [4] and here [5].


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

URL to article: http://blog.heritage.org/2010/02/04/the-public-option-threat-still-buried-in-the-senate-bill/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/US-OfficeOfPersonnelManagement-Seal.svg_.png

[2] major health care legislation will not pass: http://prescriptions.blogs.nytimes.com/2010/02/03/poll-americans-doubtful-health-overhaul-will-pass/

[3] The New England Journal Medicine: http://healthcarereform.nejm.org/?p=2934&query=home

[4] here: http://www.heritage.org/Press/Commentary/122309a.cfm

[5] here: http://www.heritage.org/Research/HealthCare/bg2364.cfm

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