More Favorable Noises For a Federalist Public Option


A new proposal by Sen. Tom Carper would spell out how to boost competition in the private market by enacting government-run plans at the state level. States could act alone or in concert with others to gain more leverage in the marketplace, and would be bound by the same rules established for private companies using the national insurance exchange envisioned by the Senate Finance bill. Another option would entail states opening their workers' employee-benefit plans to the general public.

The Delaware Democrat's plan won praise from some in his party Tuesday as a way of bridging differences among them. "Conceptually, having the states take responsibility makes a great deal of sense," said Nebraska Sen. Ben Nelson, a key voice for moderate Democrats. [. . .] Another Democratic centrist, Sen. Kent Conrad of North Dakota, said the Carper proposal was "very constructive."

(Emphasis supplied.) Now we can define the right wing of the Senate Democratic Party as in favor of the Carper Proposal (for yet another example of wonks not understanding political bargaining, see Steve Benen) and the House Democrats in favor of a robust public option (national plan, Medicare +5 rates, etc.) President Obama can swoop in and be the "consensus builder" - and put forth the Blue State Public Option - a national robust public option from which individual states can opt out. Nebraska and North Dakota can have their state run co-ops. Arkansas and Alabama can take a pass on the whole thing (no mandates, no public plan, etc.) 11 dimensional chess or just plain luck - this solution would work for me as a camel's nose under the tent health care reform worth passing.

Speaking for me only

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    Good article on weak vs strong exchanges (5.00 / 3) (#2)
    by MO Blue on Wed Oct 07, 2009 at 09:57:27 AM EST
    The weak version is state-based. It's open to only the unemployed, the self-employed and small businesses. Risk adjustment, if it exists at all, is crude. With such a limited pool of applicants, insurers aren't driven to compete, and the efficiencies of scale and competition are minimal. It never really grows, and instead exists as a marginal policy to mop up those who aren't covered by employers. Sort of an outlet shopping model for health-care, accessible only to the few able to get there.
    In the bills that passed three House committees and the Senate Health, Education, Labor, and Pensions (HELP) Committee, the exchange would be a "prudent purchaser." In other words, it would have a staff that bargained with insurers to bring down premiums--and that made sure all plans lived up to strict guidelines for coverage and customer service. In effect, any insurer that wants to offer coverage through the exchanges has to get the equivalent of a "Good Housekeeping Seal of Approval" from the administrators. This is precisely how it works in Massachusetts.

    By contrast, the Senate Finance bill envisions much weaker exchanges. Instead of choosing which plans to make available, the exchange administrators would, by law, have to accept any plan that meets a relatively minimal set of standards.

    Jon Kingsdale, who runs the Massachusetts exchange, calls that a recipe for "policy disaster," as consumers faced a dizzying array of more expensive, less regulated choices. link

    IF you think of exchanges as the magic bullet (none / 0) (#4)
    by Big Tent Democrat on Wed Oct 07, 2009 at 09:59:38 AM EST
    then this matters. I do not.

    I think a public plan is the magic bullet.

    Exchanges without a public option are meaningless.

    That is why Wyden's Plan is meaningless UNLESS there is a strong public option.


    What will matter is enough federal money (5.00 / 1) (#19)
    by Cream City on Wed Oct 07, 2009 at 10:49:26 AM EST
    to the states for this.  Wisconsin's public option, BadgerCare, that had expanded from covering children to covering adults, and got a huge response, just this week had to close off any more applicants.  We can't afford it on our own, at a time when children are dying in poorly supervised state-run day care and foster care, when the state university system -- the path to economic progress for the state as well as many in it -- is overwhelmed and underfunded and on furloughs, etc.

    So thousands of poor adults who didn't get going fast enough to get into the program sure could use a blue state option -- if we stay a blue state in the coming gubernatorial upheaval, that is.  But it would have to be an exception from all of those federally mandated and underfunded or entirely unfunded programs we have seen.


    Not in my view (none / 0) (#21)
    by Big Tent Democrat on Wed Oct 07, 2009 at 10:54:26 AM EST
    This will be a federal plan that states can opt out of.

    Yes, but my point is (5.00 / 1) (#24)
    by Cream City on Wed Oct 07, 2009 at 11:05:02 AM EST
    whether states will have to opt out if it turns out to be underfunded.  From what we have seen, it would not surprise me to see Congress, Obama, et al. (aka corporate health insurance) want it to fail. . . .

    I do not think the exchanges are (none / 0) (#10)
    by MO Blue on Wed Oct 07, 2009 at 10:21:54 AM EST
    a magic bullet. I am now and always have been for a strong, viable national public option with less restrictions on who is eligible to participate. It is my line in the sand and has been since the beginning.

    What I am doing is providing information on what elements are necessary for there to be any competition in the market place and how poorly the Senate Finance Committee has addressed the issue.

    Also, you refer to Senator Carper's proposal in your post. Sen. Carper is recommending individual state exchanges. The article shares my view that this would be the weakest way to pursue competition.


    My post is defining Carper's proposal (none / 0) (#11)
    by Big Tent Democrat on Wed Oct 07, 2009 at 10:25:51 AM EST
    at the Rightist view in the Democratic Party.

    I thought I was clear on that.


    My initial post strengths your argument (none / 0) (#16)
    by MO Blue on Wed Oct 07, 2009 at 10:35:51 AM EST
    against Carper's proposal and provides additional information. So I'm confused on your reaction to my original post.

    I dunno (none / 0) (#17)
    by Big Tent Democrat on Wed Oct 07, 2009 at 10:41:00 AM EST
    To me the exchanges fight is rather a side show in that it simply does not garner much support, in terms of votes in the Congress or in the grassroots.

    I think it is a sideshow myself.


    The exchanges will be part of any legislation (5.00 / 2) (#22)
    by MO Blue on Wed Oct 07, 2009 at 11:00:02 AM EST
    that is passed. While, I agree that the most important issue is whether or not there is a public option. There are other important components of the legislation.

    The costs and the quality of health care that people receive from the legislation will definitely be impacted by whether the exchange will be forced to accept any plan that meets a relatively minimal set of standards vs bargaining with insurers to bring down premiums and making sure all plans lived up to strict guidelines for coverage and customer service.


    Has anyone actually read the text (5.00 / 1) (#34)
    by Anne on Wed Oct 07, 2009 at 01:14:03 PM EST
    of Carper's amendment?

    If not, here it is:

    State Option to Ensure Access to Affordable Coverage

    Goal: To make sure that there is adequate competition in insurance marketplaces and to ensure that affordable health insurance choices are available to Americans.

    This amendment gives states the authority to increase competition in health insurance markets by implementing one of the following mechanisms listed below. This would allow a state to offer a state public option; however, both the executive and state legislature would have to agree.

    The state would have the option of implementing one of the following mechanisms:

    1. Participate as grantees in the CO-OP program and apply for seed funding.

    2. Open up that state's employee benefits plan.

    3. Create a state administered health insurance plan with the option of banding together with other states to create a regional insurance compact.

    Regardless of the mechanism chosen, the state would be bound by the same insurance regulations and benefit requirements as private plans in the exchange. The mechanism would have to be completely self financed, aside from initial seed funding, and would be required to have a reserve fund in the same manner that private plans have. The mechanism could not explicitly require doctors to participate, nor use provider participation in Medicare or other public programs to force participation. Additionally, the state could not use Medicare or Medicaid style price controls or rates - they would have to negotiate rates.

    The state mechanism would only be open to individuals who were eligible to acquire coverage through the exchange.

    This amendment would go into effect upon implementation of the exchanges

    When we have an opt-out plan on the table, that would be the time to weigh its pros and cons; as it is, there is no such plan, so it seems like it would be more productive to assess Carper's idea, since that is the one that is getting more and more support.

    As I read it, the states could create their own plan, but they wouldn't have to; perhaps the same states that would opt out of BTD's plan would be the states that would choose not to have a plan.

    If states did want to have their own public component, what are the chances they would want to create one out of whole cloth, i.e., from scratch?  But, let's say that all 50 states did decide to go this route.  How do 50 different state plans do anything to help reform the system?  How would 10 regional plans do that - and how would multi-state plans cope with the various differences in state coverage mandates?

    The kicker for me, though, is that when all is said and done, if you don't otherwise qualify to participate in an exchange, you won't be able to participate in whatever plan your state creates.

    So, we still are not talking about that many people, which means it is unlikely that any state plan would have any downward effect on premiums, or expand access and increase affordability.

    The Carper Amendment is, well, cr@p.

    Jon Walker has a post on why Carper's plan is (5.00 / 1) (#35)
    by MO Blue on Wed Oct 07, 2009 at 01:34:26 PM EST
    Worse than Nothing

    Carper's plan does not give states any powers that they do not already possess and applies restrictions  that would impede implementation.

    So yes

    The Carper Amendment is, well, cr@p.

    It never fails to amaze me how much time and effort the Dems expend trying to find alternative ways to make thing more complicated and worse than the status quo. But then again, it is harder to design an industry give away program and give it the appearance of providing health care.


    Nor ... (5.00 / 1) (#36)
    by DancingOpossum on Wed Oct 07, 2009 at 01:36:41 PM EST
    Nor does this plan address ongoing problems with insurers like rescission and post-claims underwriting. Only getting rid of the health insurance leeches will ensure this, which is why single-payer is still the only good option. I don't buy the incrementalist thing, sorry -- when was the last time a government plan was put in place and got bigger instead of being cut? (I mean aside from war.)

    So what happens (none / 0) (#1)
    by lilburro on Wed Oct 07, 2009 at 09:54:20 AM EST
    if I move from New York, where I am enrolled in the public option, to North Dakota, where there is no public option?

    (I'm still finding this idea to be a big Obama cop-out and I also still believe he will never do it as it goes against his entire 2004 convention speech and political identity).

    You are no longer eligible (5.00 / 3) (#3)
    by Big Tent Democrat on Wed Oct 07, 2009 at 09:58:11 AM EST
    unless someone writes in some portability idea.

    The solution of course is to not move to North Dakota.

    And indeed, that is the beauty of THIS camel's noes under the tent approach. Growth will come from the states themselves, not the federal government.

    To me this idea cracks the political nut.

    As for Obama, this would PRECISELY fit his character.


    To me (none / 0) (#6)
    by lilburro on Wed Oct 07, 2009 at 10:06:01 AM EST
    no plan symbolizes the red state/blue state split that Obama talks about more than this one.  That's what I'm saying here.

    And "don't move to ND" is not a solution, in my book.  

    I think your plan misses out on increased access to healthcare and the concept of portability.  As someone who lives in North Carolina, I've gotta say I hate it.


    I disagree (none / 0) (#8)
    by Big Tent Democrat on Wed Oct 07, 2009 at 10:11:02 AM EST
    Just because I call it the Blue State Option does not mean that is how it will be perceived.

    Heck, I could spin it as "celebrating our differences" and respecting our federalist heritage.

    Reaching out.

    A million empty cliches.

    This is incredibly easy to sell imo.


    think that was the plan (none / 0) (#12)
    by Capt Howdy on Wed Oct 07, 2009 at 10:28:46 AM EST
    all along?

    Not at all (none / 0) (#14)
    by Big Tent Democrat on Wed Oct 07, 2009 at 10:31:43 AM EST
    I think they lucked into it.

    But I am prepared to call Obama FDR if he gets it done.


    Would it be legal? (none / 0) (#23)
    by NealB on Wed Oct 07, 2009 at 11:04:31 AM EST
    It only works if it's funded by the federal government at a level that makes it work for the states that choose not to opt out. Assume the legislation passed provides enough that quite a few states choose not to opt out. The states that opt out don't have to do mandates and do not receive federal subsidies and other benefits that are funded by the federal plan. Would that be legal?

    Your first sentence is my concern (none / 0) (#25)
    by Cream City on Wed Oct 07, 2009 at 11:09:42 AM EST
    as I have not seen this Congress, this White House, as really willing to make any public option work.

    As for legality, which really is a different concern, isn't it? I can see suits brought, and I can see this Supreme Court, if it remains so conservative, tossing it out on some pretext.  But that would take years.

    So if it is sufficiently funded that it works, by the time it would be undercut legally, there could be sufficient support and an outcry to continue it -- and there's BTD's incrementalist approach again that would force our public officials to serve the public and get a real public option plan in place eventually.


    So how do they opt out? (none / 0) (#30)
    by lilburro on Wed Oct 07, 2009 at 11:42:11 AM EST
    The stimulus package, IIRC, had provisions in it that prevented states from opting out - they tried anyway, but they all failed.  If opting out is realistic how many this time WILL opt out?  

    I think this cedes ground to the wacko separatist crazies as opposed to articulating a national vision.


    When is moving to North Dakota a solution (none / 0) (#38)
    by BobTinKY on Wed Oct 07, 2009 at 06:44:11 PM EST
    to anything?

    I kid my friends in ND.


    OK (none / 0) (#5)
    by mmc9431 on Wed Oct 07, 2009 at 10:04:52 AM EST
    What if I'm traveling with work and get sick out of my state? Will a state that isn't in the program be leaglly bound to accept my state public option?

    Of course (none / 0) (#7)
    by Big Tent Democrat on Wed Oct 07, 2009 at 10:09:44 AM EST
    Silly question.

    You have insurance.


    It'll pay out (none / 0) (#15)
    by TeresaInSnow2 on Wed Oct 07, 2009 at 10:33:14 AM EST
    at some lesser rate than if you got sick in your home state.

    This flu... (none / 0) (#9)
    by Dadler on Wed Oct 07, 2009 at 10:19:54 AM EST
    ...may "do" everything for us regarding healthcare.  And not in the most pleasant or egalitarian way.  It really appears that gov't in this nation is so corrupted, so poisoned, so incapable of effective humanity, that it WANTS there to be chaos in the streets.  It seems they are making a clear choice to dig their own graves, literally, and those of millions of others.

    Forgive me, but I'm not in a good mood today, obviously.  

    Are you sick today? (none / 0) (#13)
    by Militarytracy on Wed Oct 07, 2009 at 10:29:34 AM EST
    Universal? (none / 0) (#18)
    by koshembos on Wed Oct 07, 2009 at 10:48:54 AM EST
    The State option will have several bad consequences plus a missed opportunity. Southern, Mountain and the core of the midwest states will basically have business as usual. We don't need a health care insurance civil war; we had one in the 19th century. In those states the insurance companies will go wild, while in Blue states the insurance companies will use Wall Street Shenanigans to increase their income despite the half hearted public option. They have more than enough power to water down state options.

    The worst of all is the missed opportunity to reform health care. Once a flimsy attempt passes, the next iteration will be attempted at least a decade from now, if the country did become a wholly own subsidiary of WellPoint and Aethna.

    Yep (none / 0) (#20)
    by Big Tent Democrat on Wed Oct 07, 2009 at 10:53:53 AM EST
    We need a national plan that states can opt out of.

    No, we don't (none / 0) (#32)
    by lambert on Wed Oct 07, 2009 at 01:06:34 PM EST
    We need to allow states to do better by creating their own single payer plans.

    As for expanding state workers' plans (none / 0) (#26)
    by Cream City on Wed Oct 07, 2009 at 11:12:26 AM EST
    to include more of the public, I'm under one of those, so I'm all for it if it would reduce the soaring costs of my contribution.  But I doubt that would happen.  Probably the reverse, from the history of the plan and costs here.

    Just an fyi to check the costs to state workers of state plans.  These are increasingly costly.

    Also, they are so confusing! (none / 0) (#27)
    by Cream City on Wed Oct 07, 2009 at 11:15:42 AM EST
    It's enrollment time for state workers here, so I am getting lots of mail about it from my company and the hundreds of others . . . and my new relative who comes from a country with a national health plan was perusing the materials to try to understand how health care runs here, as she looks for work.

    The result?  In addition to what she has thought of the level of debate about this here, seeing how this is set up even for government workers, she now is even more convinced that this country is nuts when it comes to health insurance . . . and that we all are being taken for a great big ride.


    Your relative has got that right. (5.00 / 3) (#28)
    by MO Blue on Wed Oct 07, 2009 at 11:21:43 AM EST
    Although CalPERS bargained for (none / 0) (#31)
    by oculus on Wed Oct 07, 2009 at 12:11:51 PM EST
    overall premium increase of 2.9%, lowest increase in 14 yrs.

    Increases have been triple that (none / 0) (#39)
    by Cream City on Thu Oct 08, 2009 at 08:56:48 AM EST
    in my state -- at least in my part of the state, which is punished for having most of the poor and thus unhealthy, with a plan that came in about five years ago to "tier" the state so state workers elsewhere pay much less.

    Ever since, year after year, soaring increases for some of us (and some increases for all).


    so... (none / 0) (#29)
    by alex1 on Wed Oct 07, 2009 at 11:21:55 AM EST
    we should weaken the federal government? does such a proposal become a slippery slope?

    Vanilla products (none / 0) (#33)
    by lambert on Wed Oct 07, 2009 at 01:07:42 PM EST
    Might be thrown into the mix at the national level. Just as a bargaining chip, you understand.

    This would be a terrific compromise (none / 0) (#37)
    by BobTinKY on Wed Oct 07, 2009 at 06:41:19 PM EST
    the best part being it puts the burden on the right wing politicians supporting insruance companies to get their state to opt out.  

    I bet that doesn't play well for them at the polls.