Health Reform: Whither a public option?

Jun 16, 2009 5:18 PM

A poll this month from the Employee Benefit Research Institute found that 83 percent of Americans support a “public plan option,” in health care reform. Another from the Kaiser Family Foundation found 65-67 percent of support for the public option. But there appears to be less support from industry groups.

The debate over whether to include a public plan as part of reform intensified last week when the American Medical Association, which represents about 20 percent of doctors, came out against a public option in a statement saying that, “a new public plan threatens to restrict patient choice by driving out private insurers, which currently provide coverage for nearly 70 percent of Americans.”

Then, with the president slated to address the group, the AMA quickly revised its position, saying:

“The AMA opposes any public plan that forces physicians to participate, expands the fiscally-challenged Medicare program or pays Medicare rates, but the AMA is willing to consider other variations of the public plan that are currently under discussion in Congress. This includes a federally chartered co-op health plan or a level playing field option for all plans.”

When Obama did speak to the group yesterday, he defended the public option and was cheered by many AMA members:

“What I am trying to do - and what a public option will help do - is put affordable health care within reach for millions of Americans. And to help ensure that everyone can afford the cost of a health care option in our Exchange, we need to provide assistance to families who need it. That way, there will be no reason at all for anyone to remain uninsured.”

So what exactly is the public option and why is it such a big deal?

Including a public option in health care reform means that among the plans available to all Americans, at least one would be a plan that would likely be managed by government health authorities. It could be based on Medicare, the government health plan that is available to everyone over 65 and those with disabilities. Or it could be completely different. The point is to have an affordable option that challenges private insurers to keep costs down and coverage up.

The text of one bill* released last week from the Senate Committee on Health, Education, Labor, and Pensions, left the description of the public plan for another day. Under the heading ‘‘PUBLIC HEALTH INSURANCE OPTION,” reads the words, “Policy under discussion.”

A compromise plan to get bipartisan support, recently announced by Kent Conrad (D-ND), would rely on a system of non-profit cooperatives that would be funded by the government to start-up, but would be managed by the co-op members. Ezra Klein at the Washington Post interviewed Conrad about the proposal last week.

Another public option plan comes from Jay Rockerfeller (D-WV). His is called the Consumer Choice Health Plan and would base payment rates on Medicare for its first two years, but would be separate from Medicare and would establish its own rates in subsequent years, and become self sufficient. It would also establish a non-profit evaluating organization to rate all of the health insurance products for affordability, adequacy, transparency, consumer satisfaction, provider satisfaction, and quality.

Consumers Union supports the creation of a public health-plan option—and endorses the Rockefeller proposal—to compete with private insurance-plan and improve the quality and results of plans they offer.
For another breakdown of the AMA position, see our advocacy blog at PrescriptionForChange.org.

—Kevin McCarthy, associate editor

*links to PDF

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