Politico suggests conflict between public option and “cost-conscious” lawmakers

Written by Jocelyn Fong

Published

A September 8 Politico article described opponents of a public health insurance option as “cost-conscious” in false contrast to “liberals who demand a public option.” In fact, both the House and Senate health care reform bills require the public plan to be self-sustaining, and the Congressional Budget Office concluded that a public option did “not have a substantial effect on the cost” of the Senate health committee bill.

Politico characterizes opponents of public option as “cost-conscious”

From the September 8 Politico article:

After a summer of setbacks, President Barack Obama has a clear roadmap for salvaging health care reform:

Convince skeptical Americans that a new system would actually help them, not limit their choices and care. Strike a compromise between liberals who demand a public option and cost-conscious centrists who call it a deal-breaker. Win over Sen. Ben Nelson (D-Neb.), an inscrutable moderate. And avoid Death Panels II, a rerun of the potent Republican attacks.

Contrary to Politico's contrast, public plan premiums would cover cost

House, Senate bills require premiums to cover costs of public plan. Both the House tri-committee bill and the Senate HELP committee's bill require the public plan to charge premiums sufficient to cover administrative costs as well as the cost of enrollees' benefits.

From the America's Affordable Health Choices Act of 2009, as introduced in the U.S. House of Representatives:

SEC. 222. PREMIUMS AND FINANCING.

(a) ESTABLISHMENT OF PREMIUMS. --

(1) IN GENERAL. -- The Secretary shall establish geographically-adjusted premium rates for the public health insurance option in a manner --

(A) that complies with the premium rules established by the Commissioner under section 113 for Exchange-participating health benefit plans; and

(B) at a level sufficient to fully finance the costs of --

(i) health benefits provided by the public health insurance option; and

(ii) administrative costs related to operating the public health insurance option.

From the Affordable Health Choices Act as passed by the Senate Health, Education, Labor, and Pensions Committee:

''(5) PREMIUMS. --

''(A) PREMIUMS SUFFICIENT TO COVER COSTS. -- The Secretary shall set premium rates in an amount sufficient to cover expected costs (including claims and administrative costs) using methods in general use by qualified health plans.

CBO: Senate bill's public plan does “not have a substantial effect on the cost or enrollment projections.” In its July 2 preliminary analysis of the Senate HELP committee's bill, CBO found that, in the words of CBO director Douglas Elmendorf, the public option “did not have a substantial effect on the cost or enrollment projections largely because the public plan would pay providers of health care at rates comparable to privately negotiated rates -- and thus was not projected to have premiums lower than those charged by private insurance plans in the exchanges.”