EDITORIAL: Kaine tries to revive 'public option'

2017-11-13 | The Free Lance-Star

Nov. 12--SEN. TIM Kaine, D-Virginia, and Sen. Michael Bennet, D-Colorado, have co-sponsored a bill that would revive a form of the "public option" stripped from the Affordable Care Act before it passed Congress and was signed into law by President Obama in 2009.

The provision was in the House version of the ACA, but was removed in the Senate version after a group of moderate Democrats threatened to join a Republican filibuster against it.

Sen. Orrin Hatch, R-Utah, described the public option as "a Trojan horse for a single-payer system." Only 33 percent of Americans are currently in favor of a single-payer approach to healthcare, according to a June 2017 survey by the Pew Research Center.

The Medicare-X Choice Act of 2017 would allow Americans who are not yet 65 years of age to purchase a Medicare-like policy from the individual and small business Obamacare exchanges, utilizing Medicare's existing network of doctors and hospitals. The plan would pay providers the same amount it pays for regular Medicare recipients while offering additional coverage for things like pediatric and maternity care.

At first, Medicare-X would only be available in rural areas where there are no competitors on the exchanges. By 2023, the public option would be open to everybody in the U.S.

Kaine says Medicare-X is needed because there are not enough affordable options available under the ACA, which remains the law of the land. But it's also an admission that the ACA has failed to expand consumer choice or lower health care costs as the law's proponents, including President Obama himself, promised it would.

In 2014, when the Obamacare exchanges opened, consumers could choose from an average of five insurers in each state. By 2017, 21 percent of Obamacare enrollees nationwide had just one choice, including residents of 63 cities and counties in Virginia who will have to settle for just one insurer in 2018 while their premiums increase 35 to 81 percent.

So much for lower costs and more consumer choice.

Under Kaine's bill, Medicare-X premiums "would cover the full actuarial cost of offering such a plan, including the administrative costs," although premiums would be reduced for low-income people who qualify for cost-sharing subsidies under ACA.

The Congressional Budget Office estimated that premiums for a public option would be 7 to 8 percent lower than for a private policy offered on the exchanges, but noted that some providers might reduce the quality of care due to lower reimbursement rates.

"Another possible drawback of this option is that if the public plan attracted high-cost enrollees and could not collect enough in premiums to cover its costs, the federal government would have to pay for the plan's losses," CBO added.

Insurers on the ACA marketplaces soon found out that they were losing millions of dollars annually because they were not able to collect enough in premiums to cover the cost of enrollees' care. For the same reason, a public option would also operate at a loss, health economist Robert Book warned last fall.

"In short order, the public 'option' will use its loss-making ability to lower premiums enough to price private-sector health insurers -- even not-for-profit organizations that have to break even -- out of the market," Book predicted. "At that point, the public option won't be an 'option' at all -- it will be the only health plan available."

Which is why the public option was rejected the first time around.