Here are four signs that President Obama’s proposal for a government-run health plan for the uninsured and small business is in trouble.
1. Baucus says the public plan is “a bit on the side of the table.” Senate Finance Committee Chairman Max Baucus (D-MT) made the comment in a meeting on Friday with reporters. Writes Congressional Quarterly: “Instead, he said, he would focus on preserving the insurance system for self-insured companies while expanding private insurance and public programs such as Medicaid….He later backed off that statement slightly, saying he might return to the government-run idea later on.”
2. DeParle talks compromise. In a press conference earlier this month (see our prior post), White House healthcare czar Nancy-Ann DeParle reiterated that Obama’s support for the public plan is aimed at keeping costs low, keeping insurers honest, and offering consumers choice. “But as he said, if there are other ways of doing that, he’d be open to talking about them,” she noted.
3. Hacker comes out swinging to defend the public plan. The public plan has been the signature concept of Jacob Hacker, co-director of the Center for Health, Economic and Family Security at U.C. Berkeley. Hacker slammed The Lewin Group earlier this month for projecting that 118 million people might switch from private plans to the proposed public plan (In fairness, Lewin offered a range of projections starting as low as 10 million, based on different public plan scenarios). Then he shot down a compromise proposal by Len Nichols and John Bertko, in which the public plan would have limited bargaining power. I’m not saying Hacker is wrong (in fact, I like his plan and have endorsed the public plan concept in general). I just give Lewin’s recent projections a little more credit than Hacker does—granted, nowhere near the 118 million level, but not nothing either. All of which makes me wonder if Hacker is feeling a tad jittery about the fate of his pet proposal.
4. Idle conversation. In an informal conversation earlier this month with a Washington policy wonk who is also a vocal supporter of the public plan, I said, “It looks like the public plan is going to happen.” She arched her eyebrows and said, “Really?”
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On the whole Hacker vs Lewin thing.
If you are in touch with the struggles of business with 2 to 99 employees on a daily basis in a macro and micro sense as I am, then you would wholeheartedly accept the Lewin Scenario for all Groups under about 99 employees.
A public plan, reimbursing at Medicare Rates to providers, could certainly offer a carbon copy of any privately insured plan at a 15-20% discount. They could then even dictate to docs and hospitals their payment mix effectively.
Offer any employer with less than 100 employees the opportunity to move healthcare out of his benefits package and give his employees a subsidy instead, averaging 15-20% below what he’s spending today, then tax break be damned, they will ALL jump to the public option.
All of them.
You might have a few wealthy law firms and doctor practices who will stay engaged in the private market, but that’s about it.
Trust me…
WR