Word comes from Politico that maybe—just maybe—the Senate is nearing a deal on the public option. You remember—that larger-than-life legislative provision that has come to represent the ideal of health reform for some and the devil incarnate for others. As Politico reported:
The new idea—for the government to create a national health insurance plan similar to the Federal Employee Health Benefits Plan—seemed to gather momentum as the weekend went on, and the differences between liberals and moderates on the public option became even clearer.
Perhaps it wasn’t clear to Politico, though, just what a national health insurance plan is—because the FEHBP program is not it. National health insurance plans refer to the universal health insurance systems found in most other countries. Under those arrangements, commonly called social insurance, every citizen is entitled to health care as a matter of right and their medical bills are paid through the national health insurance schemes, which differ from country to country.
In some, like the United Kingdom, the government acts as a single payer; in others, like Germany, there are multiple payers. Nowhere do citizens have to go through what Americans will have to go through to get health care, even under the reforms in the making. There are no income cut-offs, affordability rules, qualifications for subsidies, penalties for not buying a policy, or possibilities of becoming underinsured. None of that stuff.
The FEHBP-like plan on the table is not a social insurance program. It is not a government program; it is not government-run health care. It’s an employer-run program, and the government happens to be the employer. It is similar to the menu of health insurance options already offered to millions of workers through their employers. Think of the numerous health plan options that workers at GM, Ford, or Mt Sinai Hospital in New York City offer their workers. The FEHBP-style plan is like that.
The employer, of course, has some control over the plans it chooses to offer. It might want plans that include certain doctors and hospitals in their networks, it might want ones with high deductibles, or it might choose those with more or less cost sharing for workers. Above all, employers want plans with premiums in its preferred price range. Although employers choose which plans to offer, the insurance is provided through private insurers—both for-profit carriers like WellPoint and not-for-profits like Kaiser Permanente.
Senate negotiators are considering a setup that would allow only not-for-profit carriers to sell policies in this new scheme. It’s worth noting that about half of all people are in not-for-profit plans. It’s just that those plans have come to behave like the for-profit carriers. “Nonprofit health plans are not part of the solution; they are part of the problem,” says Washington and Lee law professor Timothy Jost. However, it seems that the government’s brokerage service, dubbed the Exchange, would also exist side-by-side and offer choices from both not-for-profit and for-profit insurance companies.
Supporters of a real public plan, the kind that might have had a shot at bringing down medical costs, already are saying that the FEHBP idea represents the demise of a true public plan. Jost told me that the idea behind the real thing would have been to use the Medicare network and pay Medicare rates plus an additional amount, which would have resulted in real price competition. “Once you move to something like the FEHBP, you lose the price advantage. There’s no value added, just administrative costs,” he said.
The nomenclature has been unclear from the get-go. During the campaign, when presidential candidates talked about universal coverage, many people thought they meant that national health insurance like that in England or Germany was around the corner. It took awhile before it sunk in that they were really talking about subsidy schemes to help more people buy private insurance policies. Campaign rhetoric centered on whose plan would cover more people. As Campaign Desk reported, the candidates were not talking about anything remotely resembling a socialized system, but a mishmash of very capitalistic schemes to get more people medical coverage.