The Opt Out

Firedoglake is against it:

It is encouraging that Senator Reid respected the will of the American people and included a public option in the merged Senate bill. However, the addition of a state opt-out provision threatens to leave millions of Americans at the mercy of private insurance monopolies, with the federal government acting as enforcers for a product with no competition to keep prices down. [. . .] [W]hile people struggling with crippling health care costs and pre-existing conditions may have to wait until 2014 for relief, states can begin opting out immediately. That means for the next four years, health care will become a partisan football at the state level, easily gamed by the same insurance company lobbyist dollars that flooded on to Capitol Hill this year.

If you can get a public option passed without an opt out, then let's do it. But if we can not, then I believe an opt out that requires enactment of a state law through regular procedure is acceptable. My view remains that the only real reform in this bill (as I have stated, there are other good features in the proposal - specifically the expansion of Medicaid coverage, but they are not meaningful reform imo) is the public option. Indeed, if given a choice I would rather have an opt out Medicare +5 public option available to more persons with an opt out than a level playing field national public option without an opt out. Neither seems politically possible at this time, even through reconciliation. More . . .

Firedoglake writes:

If Harry Reid truly cares about fighting for the good of the country over the good of Wellpoint, he will immediately dispense with the opt-out and move to reconciliation and allow a majority in the Senate to deliver to Americans what they want and desperately need.

I think this assumes a non-opt out public option can be passed through reconciliation. I do not believe that is true. A whip count is in order on this issue.

Assuming, for the moment, I am correct about the non-opt out public option not having 50 votes for reconciliation, the question becomes, as always, is it better to have this proposal or to not have it? I still fall on the side of favoring the proposal. To me the question is does this proposal create a program that can be built upon to improve health care in our country. In my view, it does - specifically, it creates a public option untethered by profit motives and tethered by the desire for cost control that does not impinge on the coverage of its beneficiaries.

Many Village Wonks hold the view that excise taxes on health insurance and the exchanges will function as cost control mechanisms. I disagree. Indeed, there is no evidence to support their views. Conversely, there is a mountain of evidence that demonstrates that government run health insurance has more effectively held down health care costs than private insurance.

It is for this reason that it is my view that the public option is the only meaningful reform that has been proposed to date. The opt out provision does not challenge that view.

Finally, with regard to the concern expressed by FireDogLake about insurance company lobbying at the state level, this seems to me to be better seen as a call for state level activism, as opposed to a lament about our broken political system. It appears to presuppose that the only political battles worth fighting are at the national level. I believe that lamenting the need for local activism is wrongheaded. The challenge should be welcomed and accepted state by state.

The public option is worth fighting for - state by state.

Speaking for me only

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    I don't think (5.00 / 1) (#1)
    by lilburro on Thu Nov 19, 2009 at 10:34:35 AM EST
    states should be able to opt-out before the program is up and running.  Bad idea.

    That is not the question imo (none / 0) (#2)
    by Big Tent Democrat on Thu Nov 19, 2009 at 10:37:31 AM EST
    The question is do you favor what can be passed by reconciliation/regular order or not?

    Suppose the opt out is not allowed until 2016, would you then favor it?

    Suppose that this change would kill the bill, would you say no to the change?

    It is possible that can provision can be bargained for. I do not think so. But I would like to see some whip counts on it.


    I would support (none / 0) (#3)
    by lilburro on Thu Nov 19, 2009 at 10:44:02 AM EST
    the bill, even if the states could opt out before the program begins.  Putting that in the Senate bill as a default to me seems like a really bad decision bargaining-wise though.  I don't see why, really, it was politically unfeasible to say you must offer it for at least a year.  I mean good lord do I have to go through 5 years of tea-parties?

    Hard to say (none / 0) (#5)
    by Big Tent Democrat on Thu Nov 19, 2009 at 10:48:59 AM EST
    But I doubt it was an accident.

    I assume Reid is shooting still for 60 and this was how he thought he could get it.

    Think of it this way - an amendment to strip out the public option will be presented. Suppose you filibuster that amendment - what do you THEN say to the people who may filibuster HCR. That you get to but they do not?

    So you have to design the PO to survive a vote n the amendment - to wit you must have 50 votes on hand for that PO. Do you have it without that provision?

    I do not know and neither does FDL.


    5 years of tea parties ... (none / 0) (#11)
    by Robot Porter on Thu Nov 19, 2009 at 11:45:44 AM EST
    could be a good thing.  I bet they'll lose more often than they win on the state level.  And the energy they waste there will be energy they don't have to fight on other issues.

    You ought to see some exposes (5.00 / 1) (#14)
    by Cream City on Thu Nov 19, 2009 at 12:06:22 PM EST
    about those regulatory boards in some states and their ties to the industry.  Yes, federal review is needed, too.

    I'm just looking for ... (none / 0) (#17)
    by Robot Porter on Thu Nov 19, 2009 at 12:22:54 PM EST
    silver linings.



    Good luck with that (5.00 / 1) (#23)
    by Zorba on Thu Nov 19, 2009 at 01:41:00 PM EST
    So am I, but I don't really expect any.  ;-)

    Is there a chance that once Jane (5.00 / 0) (#9)
    by Militarytracy on Thu Nov 19, 2009 at 11:21:47 AM EST
    and the like minded are finished with them and if we don't have public option for every state, that the Senate will beg for at least the opt out?  I'm fine with however this goes down as long as public option gets in somewhere (actually I'm secretly for for the thing that makes Shelby and Sessions most look like the jerks they are but it isn't all about me).

    Is the mandate also opt out? (5.00 / 1) (#21)
    by Manuel on Thu Nov 19, 2009 at 01:16:16 PM EST
    When states opt out of the public plan, do they also opt out of the mandate?

    The Senate bill is not Medicare +5 percent (5.00 / 1) (#22)
    by Makarov on Thu Nov 19, 2009 at 01:33:00 PM EST
    According to one report, like House 3962, it calls for "negotiated" rates. With no provision to require providers to accept it, this means basically creating a health insurance plan from scratch.

    A Medicare provider base with +5% reimbursement could provide some competition to private insurance. Pro-pass anything now "reform" proponents argue that at some point down the road, the public plan could be expanded beyond its initial limited scope. As unlikely as I view that prospect, I will admit it is possible. The problem is, that isn't in either of the current House/Senate bills.

    As the CBO noted, a public plan with negotiated rates will likely more than private plans offered in the exchange. How is that effective choice and competition? It isn't.

    All of this makes me wonder why people are still arguing for this type of "reform". It's reform that will benefit the small % of people who will gain Medicaid coverage, and a handful of those who qualify for subsidies. Even most of those receiving subsidies, however, will find health care unnaffordable if they do become seriously ill and have to pay close to the out of pocket maximums.

    Why people are still arguing... (5.00 / 1) (#46)
    by lambert on Thu Nov 19, 2009 at 05:08:08 PM EST
    ... for this type of "reform"?

    The cynical (HCAN't, et al) don't care; they've booked the revenue for their campaigns. The newly enlightened can't admit how badly they got played.

    It's a lot like keeping your powder dry, except not.


    Fighting denials... (5.00 / 2) (#53)
    by DancingOpossum on Fri Nov 20, 2009 at 09:19:55 AM EST
    only six in ten consumers (61%) understand their rights to appeal a denied health insurance claim

    And those who do know, and do appeal it, find themselves up against a ruthless insurance behemoth that will crush them with everything it has, just to avoid paying the claim. The ones who can keep fighting are brave indeed, and more power to them, but not everybody has the knowledge or the stomach to keep hassling with the insurance giants. A few hardy souls will hire lawyers to help them and the stories that come out in discovery are hair-raising indeed.

    On an anecdotal level, I know of one woman (a professional acquaintance) whose husband came down with a crippling, serious illness a few years ago. When she talked about it, her main topics of conversation  were (a) the specialists she was trying desperately to line up for him and (b) the constant, unending, soul-crushing work of dealing with their insurance company. The kicker? Both are extremely wealthy, high-powered lawyers. What hope is there for the average working person, already demoralized and impoverished by our brave new world of Robber Baron Redux?

    I also think (none / 0) (#4)
    by Capt Howdy on Thu Nov 19, 2009 at 10:46:39 AM EST
    the states that "opt out" will soon see other states getting better cheaper coverage and will change their minds about that.

    Unless (5.00 / 2) (#6)
    by hookfan on Thu Nov 19, 2009 at 11:09:05 AM EST
    there's a limiting factor, it may actually go the other way. Unless the insurance companies are restricted, why would they not target individual states with maximum rate increases allowed( or they can get away with) that don't opt out, and limit premium price increases in states that do? Why wouldn't that pressure state legislatures to opt out? Having to go through 4 years of extreme price gouge doesn't seem healthy for any state legislature, especially in a severe recession and voters compare prices with other state rates.

    Insurance companies can't (5.00 / 1) (#13)
    by vicndabx on Thu Nov 19, 2009 at 11:59:50 AM EST
    just arbitrarily raise premiums.  They have to get them approved via State Insurance Departments.  

    Further, the Senate bill requires insurers to submit rate hike requests to the fed gov't for approval.  The fed requiring additional review is redundant and a waste of time/resources.


    Time honored way of getting aroung this.... (5.00 / 1) (#15)
    by trillian on Thu Nov 19, 2009 at 12:10:21 PM EST
    ....."Your present plan is no longer offered"

    And then they sign you up for a new plan...which of course costs more.

    Many states already don't allow Ins companies to raise rates but they ALWAYS manage to get around it.


    Proof? (none / 0) (#16)
    by vicndabx on Thu Nov 19, 2009 at 12:22:39 PM EST
    or your gut feeling?  

    Sign you up - thought it was your choice as to the plan chosen.  As an employer you can definitely choose, based on affordability.  Employee maybe not so much, but then an employee wouldn't now about plans being cancelled and their costs.


    Large companies (5.00 / 1) (#24)
    by Zorba on Thu Nov 19, 2009 at 01:50:57 PM EST
    are very often "self-insured" (although they usually contract with regular insurance companies to administer the plans for them) and therefore are not covered under state insurance regulations.

    ERISA (5.00 / 1) (#41)
    by jedimom on Thu Nov 19, 2009 at 04:32:39 PM EST
    self funded plans are covered under Dept of Labor ERISA regulations

    If it's customary rates (5.00 / 1) (#25)
    by hookfan on Thu Nov 19, 2009 at 02:45:22 PM EST
    they're getting  30% yearly increases currently. State insurance regulation often is not effective now. In Washington state, for example, insurance regulation for premium price hikes was largely rendered moot by insurance companies refusing to offer programs. Insurance companies often have unusual clout in states where they are headquartered. Think jobs. If they pulled out of Deleware, or South Dakota, or Nevada, or New York what do you think would happen?
     So, we have what's usual and customary already being established as double digit hikes yearly, and states dependant upon insurance company money for jobs, and campaign contributions don't forget.
       The argument has been that insurance involves a huge proportion of the work force, so they had to be shored up and single payer chucked. Well, why doesn't that same argument apply to state by state fights?

    It seems (5.00 / 2) (#31)
    by Zorba on Thu Nov 19, 2009 at 03:27:43 PM EST
    an awful lot like the state "public utilities commission" (or whatever each state calls it).  In my state, at least, the utilities commission is supposed to okay any rate increases by the electric company.  Somehow, they always seem to okay the increases.

    Unless of course (5.00 / 1) (#26)
    by Steve M on Thu Nov 19, 2009 at 02:55:18 PM EST
    you have a hands-off state insurance commissioner, in which case the federal review is pretty important in terms of protecting consumers.

    What's the criteria (none / 0) (#28)
    by hookfan on Thu Nov 19, 2009 at 03:23:22 PM EST
    for limiting premium increases? Is it outside of what's customary and usual? And federal review doesn't just chuck insurance industry interests either.
       What happens to federal review when a Republican administration is elected? Just like the regulations on the banking industry? Yeah, that's the ticket.
       Insurance companies are now garnering double digit increases in premium hikes. Nobody is stopping them. They'll have four years to continue  and establish a higher baseline for what's usual.
       Finally, what's to prevent a large insurance company from relocating to more "industry friendly" states that opt out thus bringing those fortunate states needed money and jobs, while those who stay with a public plan get financially and occupationally screwed?

    Under current law (none / 0) (#33)
    by Steve M on Thu Nov 19, 2009 at 03:33:09 PM EST
    you cannot sell insurance in a given state unless you play by THEIR rules, including restrictions on premium increases.  It is not like credit-card companies.

    Under a Republican administration, federal review might become lax, but that is why Democrats are not proposing to REPLACE state-level review with federal review.  They are merely adding an additional layer.


    Wanted to reply to your earlier post but (none / 0) (#36)
    by vicndabx on Thu Nov 19, 2009 at 03:35:18 PM EST
    it fits just as well here.  

    Personally, I think people really have no clue on what goes on w/respect to costs.  The National Association of Insurance Commissioners (NAIC) conducted a survey that bore out this very fact.

    In the survey of 1,000 consumers conducted Oct. 21-26, only six in ten consumers (61%) understand their rights to appeal a denied health insurance claim and fewer than one in three consumers strongly understands the cost factors that determine their health insurance premiums. Additionally, a strong minority of consumers (19%) also acknowledge they may go to an out-of-network doctor for health care insurance coverage.  These consumer attitudes toward understanding health insurance trigger clear financial implications.


    Re: your earlier comments about political constituencies having influenece, fact is there still needs to be justification for the rate increases.  These same constituencies apply pressure against increases also.  It's not all about profits.  These same struggles occurred years ago when most of these insurance plans were not-for-profit.


    If that is in fact the case (none / 0) (#29)
    by vicndabx on Thu Nov 19, 2009 at 03:25:35 PM EST
    you have a hands-off state insurance commissioner

    Perception, sure.  Reality, may be quite different.  Since we are talking about 50 different states however, I'm sure there may be some who are more hands off than others.  I would imagine there are quite a few who are hands on as well.


    I don't get what you mean (none / 0) (#35)
    by Steve M on Thu Nov 19, 2009 at 03:34:06 PM EST
    you started off sounding like you were disagreeing, but it sounds like you agree with me 100%.  If your state insurance commissioner isn't tough on insurance companies, then the federal regulator might indeed be a lot more useful than "redundant."

    To clarify (none / 0) (#38)
    by vicndabx on Thu Nov 19, 2009 at 03:40:48 PM EST
    I don't think the addt'l federal scrutiny is needed.  Rather, steps need to be taken to reassure the public that State Commissioners are doing their job.  Part of that job should be to explain/inform people when increases are due to utilization of services by the state's residents.

    I can neither agree nor disagree with you as I'm only aware of the activities of a single state's commissioner.  Sub-point is we can't assume all these commissioners are sleazy back-room dealers.


    Well (5.00 / 1) (#40)
    by Steve M on Thu Nov 19, 2009 at 04:13:44 PM EST
    I certainly agree with you on that last point.  Some commissioners are positively pro-consumer crusaders.  I represent a lot of insurance clients and they certainly don't act like the insurance commissioner is their buddy.  But there will always be states that are more "business-friendly" and I think we all know what that is a euphemism for.

    The argument in your first paragraph is a bit difficult for me to follow, because it sort of presumes that all the state insurance commissioners are, in fact, doing their jobs.  Of course I would agree that if that is the case, there's no need for another layer of scrutiny.  But if there are states where premium increases get rubber-stamped notwithstanding the lack of a demonstrated need, what do you think the remedy should be, if not a federal regulator?  Is the federal government supposed to send out informational mailings that say "by the way, people of Missouri, your insurance commissioner is a corporate tool"?


    Heh, corporate tool (none / 0) (#42)
    by vicndabx on Thu Nov 19, 2009 at 04:43:24 PM EST
    That may work.  They could have a show on VH1 - Corporate Tool Academy.

    Seriously tho, The feds could just as easily require rate increase details be posted on the state's website and/or ads be taken out in local newspapers.  The info would likely reach more people, and you'd avoid another potential layer of political influence.  You'd would, I believe, by default force cmsrs. to do their jobs since there'd be increased dissemination of the info.  You'd also (hopefully) get more people aware of what's going on w/healthcare in their state and potentially influence some to make better choices/ask more questions w/regard to utilization.


    sort of hard (none / 0) (#12)
    by Capt Howdy on Thu Nov 19, 2009 at 11:55:14 AM EST
    to imagine them allowing that to happen

    The Public Option they plan (none / 0) (#30)
    by pluege on Thu Nov 19, 2009 at 03:26:07 PM EST
    will only be for the sickest people. It will never be cheaper than the insurance clientele mostly made up of well people. Like 'no child left behind' was set up to make the publicly funded education system fail, the 'public option' Congress is planning for so-called HCR will make any government involvement in health care look terrible and insurance companies look great.

    Most democrats are barely better than republicans, and are generally more dishonest, deceitful and conniving. They are driven to protect their financial backers, i.e., corporations. The non-rich American people generally have no representation at all - they're non-rich so pols could care less what they need.


    It seems as though (5.00 / 2) (#34)
    by Zorba on Thu Nov 19, 2009 at 03:33:40 PM EST
    we really need a viable third party.  Not to mention term limits and public financing of elections.  Not in my lifetime, I'm afraid.  (I am a life-long Democrat but getting increasingly disillusioned with the Democratic Party.  It's unfortunately true- the Democratic Party left me, I didn't leave the Democratic Party.)

    Sure (none / 0) (#37)
    by Steve M on Thu Nov 19, 2009 at 03:35:19 PM EST
    everybody I know thinks we need a viable third party.  The unstated assumption is that the third party will agree with us on everything that matters.

    Actually (5.00 / 1) (#39)
    by NYShooter on Thu Nov 19, 2009 at 03:57:28 PM EST
    I would be open to the idea of 4, 5, or 6 viable parties. Let the leading parties negotiate workable coalitions.

    It seems to me that this kind of representation would be much more sensitive to fulfilling the needs of the people, rather than special interests.

    Having two humongous Party dinosaurs is analogous to the behemoth, "too-big-to-fail" banks.


    arent we (none / 0) (#32)
    by Capt Howdy on Thu Nov 19, 2009 at 03:27:58 PM EST
    a ray of sunshine?

    Agreed that state-by-state battles are critical (none / 0) (#7)
    by lambert on Thu Nov 19, 2009 at 11:13:13 AM EST
    Which is why "progressives" supported the Kucinich amendment to permit single payer experiments in the states so vociferously with their posts and whip tools.

    Oh, wait...

    States who opt out (5.00 / 1) (#8)
    by Big Tent Democrat on Thu Nov 19, 2009 at 11:14:26 AM EST
    can create a single payer system.

    Is there a Senate equivalent of the (5.00 / 1) (#18)
    by Anne on Thu Nov 19, 2009 at 12:23:17 PM EST
    Kucinich amendment that would relieve the states from the ERISA provision that allows the federal government to block state programs that impinge on employer-based health plans?  

    Because that was the stumbling block to the states being able to create their own single-payer plans, so unless the Senate bill deals with it, I don't know that the path to state single-payer plans is as simple as your comment suggests.


    I think there is an implict provision (none / 0) (#20)
    by Big Tent Democrat on Thu Nov 19, 2009 at 12:45:47 PM EST
    to that effect - tho get out of the public option, a state has to offer a program that is at least as good as the insurance offered under the public option.

    I think that would provide that opening.


    State plans could be challenged in court... (5.00 / 1) (#43)
    by lambert on Thu Nov 19, 2009 at 04:57:50 PM EST
    ... under ERISA, and have been, successfully. The Kucinich amendment would have eliminated that route to challenge single payer plans at the state level.

    If you know differently, please provide a link.


    I'd like some of what these folks are smoking (none / 0) (#10)
    by vicndabx on Thu Nov 19, 2009 at 11:36:09 AM EST
    if they think this bill is a boon for the Insurance Industry.
    fighting for the good of the country over the good of Wellpoint

    You don't think a guaranteed market is a boon? (5.00 / 2) (#44)
    by lambert on Thu Nov 19, 2009 at 05:03:16 PM EST
    As Ian Welsh wrote:
    Is forcing people to buy insurance the real goal? The best way to make money, bar none, is to have government force people to buy your product. It's a wet dream for any industry, so if it's going to be done, it has to be done right--it has to be very highly regulated and controlled with rates of return set like utilities.

    Of course, to some people, a "wet dream" might not be a boon. So there's that.

    Well, considering all of the requirements (none / 0) (#47)
    by vicndabx on Thu Nov 19, 2009 at 06:07:59 PM EST
    around covering anyone, and the numerous other unfunded mandates combined w/clauses that require insurers to refund monies back to subscribers; which btw will likely only amount to a few dollars, not sure if insurers will be rakin' in the dough.  You also consider those that may be covered under expanded Medicaid coverage minus those who may just decide to pay any fines and go without, then divide that by the number of insurers out there, again, may not be the boon it's claimed it will be.

    You believe regulation is effective, then? (none / 0) (#49)
    by lambert on Thu Nov 19, 2009 at 06:56:35 PM EST

    I do (none / 0) (#52)
    by vicndabx on Fri Nov 20, 2009 at 06:33:42 AM EST
    Insofar as I'm exposed to such and efforts to adhere to them in my state.

    Thanks for the personal testimony (5.00 / 1) (#55)
    by lambert on Fri Nov 20, 2009 at 09:48:00 AM EST
    Of course, if regulated, employer-based insurance were the answer, we wouldn't be in the position we're in. Insanity is doing the same thing while expecting a different result....

    My suggestion to you -- and it may even be your fiduciary duty in our current insane system -- would be to look into hiring one of the many companies who consult to insurance companies on ways to game the regulations.


    Here is what my GOP Congress (none / 0) (#19)
    by oculus on Thu Nov 19, 2009 at 12:30:05 PM EST
    person thinks I should have:


    True Reform or Bust (none / 0) (#27)
    by pluege on Thu Nov 19, 2009 at 03:14:38 PM EST
    Whatever sick anemic phony sop to insurance companies that obama gets passed and hails as epic landmark reform, will be the end of "reform" for decades.

    Over 20 years, less people will suffer with true reform enacted in 8 years than the less-than-half measures being considered today.

    Progressives should force at a minimum a strong public option with no opt out.

    If that were going to happen.... (none / 0) (#45)
    by lambert on Thu Nov 19, 2009 at 05:04:01 PM EST
    ... it would already have happened.

    Based on what would real reform have (5.00 / 1) (#48)
    by pluege on Thu Nov 19, 2009 at 06:26:08 PM EST
    already occurred?

    The US is moving from a large middle class society to a highly striated society, with a tiny, very rich plutocracy on top, and a large impoverished underclass. The plutocracy will give as little reform as they can get away with to keep the underclass just short of organized outrage.

    The less than half measure reforms that democrats are trying to push through is designed to keep the suffering just tolerable and stifle any real reform for decades. The republican and conservative DINO obstructionism, and the corporate media all play a part in the game to make sure that what they call reform is not a smidgen more than it takes to fool the masses into thinking they did something for them when in reality this will be nothing more than more give away to the insurance companies and health care service providers.

    rejecting this manipulation would keep the heat on for real reform vs. letting the plutocrats get away with another 50 years of ripping off the average schmoe.


    I think we're agreed (none / 0) (#50)
    by lambert on Thu Nov 19, 2009 at 06:58:10 PM EST
    I'm all in favor of rejecting the manipulation. I was responding to this:
    Progressives should force at a minimum a strong public option with no opt out.

    If that were going to happen, the "progressives" would already have made it happen.

    What I hear from some progressives (5.00 / 2) (#51)
    by pluege on Thu Nov 19, 2009 at 07:38:33 PM EST
    seems enough could be stiffened with enough grassroots pressure into rejecting the "reform" hoax

    'Tis a consummation... (5.00 / 1) (#54)
    by lambert on Fri Nov 20, 2009 at 09:45:29 AM EST
    devoutly to be wished.