New York Times Editorial: The Non-Public Option

New York Times Editorial: The Non-Public Option
Copyright by The New York Times
Published: December 9, 2009
http://www.nytimes.com/2009/12/10/opinion/10thu1.html?th&emc=th


Ten Democratic senators are calling for abandoning the much-maligned “public option” — a government-run health insurance plan to compete with private insurers — and replacing it with two programs that might achieve the same goal of expanding Americans’ choices and providing some competition.

We won’t know if this compromise does that until the Congressional Budget Office has evaluated it. But we admire the senators’ desire to try to move reform legislation forward.

We have long championed the idea of a public plan. With no need to turn a profit and backed by government muscle, it could charge lower premiums and probably induce its private competitors to lower their premiums. But the insurance industry and Republican critics were determined to kill or severely weaken a public plan.

As currently embodied in the Senate bill, the public plan would be sold only on new insurance exchanges that would be open just to people who buy their own insurance policies and to certain small businesses. And instead of imposing rates based on Medicare’s relative low reimbursements, it would have to negotiate how much to pay health care providers (just as private plans do). The C.B.O. believes the public plan’s premiums would be higher than the average private plan’s.

We still believe that a weak public option is better than none. Here are the details, as of now, of the possible alternative:

MEDICARE BUY-IN People ages 55 to 64 who are eligible to use the exchanges would be permitted to buy coverage from Medicare. Unlike older Americans, this younger group would have to pay the full premium themselves unless their incomes are low enough to qualify for subsidies. The premium could be in the neighborhood of $7,600 a year for single coverage.

Whether people would find Medicare attractive at this price is not clear. Expanding Medicare to cover even a few million people strikes us as promising. Medicare, which pays low rates to providers, might actually offer stiffer competition to private plans than the current weak version of the public option in the Senate bill.

REGULATED NONPROFIT INSURANCE For people below age 55 who are not enrolled in group coverage, the insurance industry would have to create an array of nonprofit insurance plans to compete with for-profit plans on the exchanges in every state. (If industry fails to do this, the government would create them.) The plans would be approved and supervised by the government’s Office of Personnel Management, which administers the health insurance plans offered to members of Congress and federal employees.

These plans could have great difficulty competing in states where they lack networks of doctors and hospitals and where entrenched insurers and hospital combines dominate the market. But that is also true of the weak public option. And in at least some places they would provide more choice for consumers.

At this point, even the 10 Senate negotiators have not fully agreed to all elements of the deal. They have simply agreed to have the budget office evaluate it. Until that is in, it is impossible to know whether this nonpublic option is an acceptable alternative.
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