Public Option Trigger Touted as Compromise

Legislators Try to Hammer out Details of Reform Plan

After receiving an earful from constituents on both sides of the healthcare debate during their summer break, legislators returned to Washington eager to hammer out the details of a reform bill before the end of the year. With public opinion turning against the reformers, President Barack Obama capped off the next stage of the process with a congressional address aimed at defining his goals and reversing the downward trajectory of views on his handling of the issue. Meanwhile, in an attempt to disarm critics of the public option, lawmakers were discussing the possibility of a compromise—a legal mechanism that would trigger the creation of a public health plan only if private insurers fail to meet certain benchmarks.

One of the most divisive aspects of healthcare reform, the debate over whether or not to create a government-run health plan, known as the public option, has fired up both supporters and detractors of the proposal. Mr. Obama has yet to provide a draft bill or a detailed outline of his legislative priorities, but he expressed his support for creation of an insurance exchange that includes a public plan while insisting that he does not want to put insurance companies out of business. When he spoke about health insurers before a joint session of Congress on September 9, he said, “I just want to hold them accountable. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange.”

America’s Affordable Health Choices Act of 2009 (HR 3200), the draft bill that has received the most attention thus far, would create a new health insurance exchange with a public health insurance option operating alongside private plans. The bill also includes requirements for individuals to carry basic health insurance and for businesses to provide employees with insurance or pay new taxes. An income tax surcharge on high-income individuals is also included to help pay for the reforms.

Although the president has repeatedly stated that individuals satisfied with the health plan that they currently have will be allowed to keep their coverage, HR 3200 sets minimum standards for “qualified health plans.” Employer-provided and individual health plans would need to come into compliance with the same requirements as qualified plans after a 5-year grace period, during which time the policies could not be changed and new beneficiaries could not enroll. The bill includes a description of essential benefits package requirements for minimum services to be covered as well as rules on cost sharing and out-of-pocket spending limits.

Legislative Trigger
Rather than creating a public option outright, reformers have begun discussing inclusion of language in a final healthcare bill that would set a deadline for insurers to either meet certain conditions or be forced to compete with a newly created public option. This trigger option is being characterized as a compromise designed to win support from lawmakers who have endorsed some of the broad principles of healthcare reform but who currently oppose creation of a government-run health plan.

On the eve of the president’s speech, Speaker of the House Nancy Pelosi (D-CA) warned insurers recoiling at the prospect of a public plan that they might find a triggered public option even more objectionable. “They’d be better getting a public option now than one that is triggered because if you have a triggered public option, it’s because the insurance industry has demonstrated that they’re not cooperating, they’re not doing the right thing, and I think they’ll have a tougher public option to deal with,” the speaker said.

Private health insurers have been receiving more direct fire from reformers critical of their business practices and profit-driven model. Seeking the support of Americans who already have insurance, Mr. Obama took aim at insurance companies in his congressional address. “Those who do have insurance have never had less security and stability than they do today. More and more Americans worry that if you move, lose your job, or change your job, you’ll lose your health insurance too. More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won’t pay the full cost of care. It happens every day,” he said.

In response to the president’s speech, Karen Ignagni, president and CEO of America’s Health Insurance Plans, said improving the current system without creating a public health plan is the best way to reform healthcare. “New health insurance reforms and consumer protections will solve the problem without creating a new government-run plan that will disrupt the quality coverage that millions of Americans rely on today. We share the concerns that hospitals, doctors, employers, and patients have all raised about the significant unintended consequences of a government-run plan,” Ms. Ignagni said.

Although reformers continue to disagree over important aspects of how to achieve healthcare reform, they continue to cast their support behind efforts to pass a significant piece of legislation. And despite the president’s stated openness to alternatives, majority leaders from both houses of Congress have made it clear that their sights are fixed on inclusion of some sort of government-run health insurance option. Harry Reid (D-NV), Senate majority leader, has stated on multiple occasions that reformers plan to make their best effort “to have a public option or something like a public option before we finish this work.”

Rep. Pelosi has stated that any bill lacking a strong public option would not pass the House. Early in September she said that, “any real change requires the inclusion of a strong public option to promote competition and bring down costs. If a vigorous public option is not included, it would be a major victory for the health insurance industry.”

In contrast, Senate Finance Committee Chairman Max Baucus (D-MT) expressed doubts about the viability of a public option passing the Senate. “The public option cannot pass the Senate,” Sen. Baucus said. “I could be wrong, but it’s my belief that the public option cannot pass.”

At the same time the president was asking Congress to get behind his vision for reform, Sen. Baucus was asking for support and feedback on a bill that would create nonprofit cooperatives that could sell health plans in competition with private insurers. Cooperatives are being proposed as another alternative to outright creation of a government-run health plan.

During his congressional address, the president expressed his support for the public option and openness to alternatives while addressing critics on both sides of the issue. “Its impact shouldn’t be exaggerated—by the left or the right or the media. It is only one part of my plan, and shouldn’t be used as a handy excuse for the usual Washington ideological battles. To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage available for those without it. The public option…is only a means to that end—and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of healthcare, we should work together to address any legitimate concerns you may have.”

On the day he addressed Congress on healthcare, results of a poll conducted by the Associated Press and GfK Roper Public Affairs & Media between September 3 and September 8 found that total approval of the president’s handling of the issue was at 42%, an 11-point decrease since the same poll question was asked this April. Total disapproval of the president’s handling of healthcare reform had reached 52%, up from 28% in April. In addition, 43% of respondents expressed strong disapproval compared with 18% in April, and strong approval had decreased from 28% to 22%.

The same poll found that total support for the healthcare reform plans being discussed in Congress is at 34%, with 16% strongly supportive. Total opposition was 49%, with 36% strongly opposed. Slightly more respondents said the president and Congress should scrap the current negotiations and start over from scratch (42%), rather than keep working to pass a healthcare plan by the end of the year (39%).

Following his healthcare speech, a new opinion poll indicated that the president had failed to win much additional support for his reform proposals. Results of an ABC News/Washington Post poll of 1007 adults conducted September 10-12 showed that 48% of Americans approve of Mr. Obama’s handling of healthcare and 48% disapprove. Their support for a public option was at 55%, with 42% opposed. And if the divisive public option were taken off of the table, support for the remainder of his reform efforts stands at 50%, with 42% opposed.

By 54% to 41%, more Americans said that the more they hear about healthcare reform the less they like it, and only 16% believe reform will make their care better versus 32% who think reforms will make the care they receive worse. Among the uninsured, 51% believe reform will improve their coverage.

Despite the failure to win additional public backing for his reform proposals, Mr. Obama continues encouraging Congress to act quickly. He expressed his unflinching determination to sign health insurance reform into law and asserted that this latest attempt will not be a flash in the pan. “I am not the first president to take up this cause,” he said, “but I am determined to be the last.”—Charles Boersig