Quoting at length from TPM:
If this trade-off carries the day, the opt out public option is gone.
In its place will be many of the alternatives we've been hearing about, including a Medicare expansion and a triggered, federally-based public option, the aide said.
As has been widely reported, one of the trade-offs will be to extend a version of the Federal Employees Health Benefits Plan to consumers in the exchanges. Insurance companies will have the option of creating nationally-based non-profit insurance plans that would offered on the exchanges in every state. However, according to the aide, if insurance companies don't step up to the plate to offer such plans, that will trigger a national public option.
Beyond that, the group agreed--contingent upon CBO analysis--to a Medicare buy in.
That buy-in option would initially be made available to uninsured people aged 55-64 in 2011, three years before the exchanges open. For the period between 2011 and 2014, when the exchanges do open, the Medicare option will not be subsidized--people will have to pay in without federal premium assistance--and so will likely be quite expensive, the aide noted. However, after the exchanges launch, the Medicare option would be offered in the exchanges, where people could pay into it with their subsidies.
By 2019, 26 million people will are projected to get their insurance from the exchange in the Senate health care bill, according to the CBO (PDF, p. 20). If one-third of the people eligible are projected to purchase a public option tied to Medicare rates (as the CBO says), than even if the Medicare expansion was open to everyone in the exchange, it would only cover 8.7 million people. However, it will only be open to 55-64 year olds in the exchange, and as such could cover less than 2 million people.
It is worth noting, however, that the current Senate health bill would cover 15 million more people with Medicaid than current law. With even 1.5 million coming in from the Medicare expansion, that is a total of 16.5 million more people receiving public health insurance.
That compares to 11 million under Medicaid (PDF, p. 17) in the House bill that came out of committees in July, plus another 10 million from a Medicare +5% public option. That is a total of 21 million more people receiving public health insurance. It is a decline of 4.5 million, or about 20%, from where the campaign stood in July.
The expansion of Medicaid was included in the bill as an attempt to mollify progressives who wanted a new public option program. The Medicare buy-in was done to do exactly the same. This means that even if there is no new public option, the campaign for the public option still will have resulted in millions more Americans receiving public health insurance.
It is not the scope of victory we aimed for, but it is hard to call a significant expansion of public health insurance a total defeat for a campaign that was designed to expand public health insurance. While it was not expanded in the way we envisioned, it was expanded nonetheless. Directly as a result of the public option campaign, at least five million more Americans will receive good, public health insurance. And this is part of an overall bill where at least 16-17 million people--most of them low income and currently uninsured--will receive public health insurance.
Plus, the Franken amendment will be in the bill:
Additionally, there was consensus support for a requirement long backed by Sen. Jay Rockefeller, D-W.Va., and other liberals for insurance companies to spend at least 90 percent of their premium income providing benefits, a step that supporters argue effectively limits their spending on advertising, salaries, promotional efforts and profits.
Score! That is actually up from 85% in the House bill. This is a major improvement.
In summary, here are the important concessions that have been won since July in return for dumping the Medicare +5% option (that public option would have been available to everyone in the exchanges, and would have covered 10 million, but didn't even have the votes to pass the House):
- 4 million more people covered by Medicaid
- 1-2 million covered by a Medicare buy-in
- An increase in the percentage of money received by health insurance premiums that must be spent on health care from 85% to 90%
And there is a trigger too, but so friggin' what. That was never meaningful.
Now, even a Medicare +5% public option, available to everyone in the exchange, was a major concession from Medicare for all. Still, there is no way we would have gotten even the three meaningful concessions listed above without the broader campaign for the public option.
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