Democrats Might Revisit Public Option for Insurance Exchanges
On Thursday, a group of 128 House Democrats plans to introduce new legislation that would resurrect the public health insurance option, which members say would help address the federal deficit, the Los Angeles Times reports (Levey, Los Angeles Times, 7/21).
History of Public Option
The idea of a public plan emerged as a contentious issue during the nearly two-year health reform debate. A public option was included in two House committee health reform bills and the House overhaul bill (HR 3962) last year, but was eliminated from the final legislation (HR 3590) amid strong opposition from Republicans and limited support from Democrats.
Details of New Proposal
Under the House Democrats' new proposal, the public plan would be accessible to consumers through the new insurance exchanges that will be created in 2014 under the health reform law.
Rep. Lynn Woolsey (D-Calif.) said that it is similar to a proposal in legislation approved by the House Education and Labor Committee but that it was adjusted to fit in the exchanges.
Proponents of the plan said it would set reimbursement rates at 5% above Medicare rates and eventually cut the deficit (McCarthy, CongressDaily, 7/22).
According to a Congressional Budget Office analysis, the proposal would reduce government spending by $68 billion between 2014 and 2020. Supporters of the proposal said that the government's administrative costs would be lower than private insurers' and that the public plan would pay hospitals and physicians less, which would mean reduced premiums and government subsidies for policyholders.
Prospects for the Legislation
The new legislation likely will face an uphill battle particularly because Congress already has a full legislative calendar and because House Democratic leaders might have little interest in restarting debate over health care.
In addition, Republican members concerned with budget issues are not likely to support the legislation, even though the projected reduced expenses are similar to what the main House GOP health care proposal would have generated, according to CBO.
Insurers, hospitals and other industry players also noted that a public plan could threaten the viability of employer-provided insurance (Los Angeles Times, 7/21).