Public Option Popularity in Limbo

by Gillian Hubble

categories: Enemies of Reform, Obama and Congress, Public Plan

Published October 22, 2009 @ 06:00AM PT

Consider this a watch list update. Things are looking rosy for a public option right now. The majority of Americans support it, up to 57% from 52% two months ago. Bipartisanship is no longer in vogue, with 51% preferring a public option to a bipartisan one. Nancy Pelosi is rumored to be inserting a strong public option in the House bill, one that may be cheaper and cover more people than the combined Senate bill. Even Harry Reid is considering including “public option lite” in the Senate bill, with a state opt-out clause. So why all the talk about the public option being in limbo, of looking for alternative ways to try and keep private insurers in check?

You would think that the House considering rebranding the public option as “Medicare” (Ted Kennedy is smiling) would be a great sign. But there’s dissention underneath the momentum. Digging a little deeper into the Washington Post/ABC News poll above reveals public dissatisfaction with overall reform provisions: 45% support them, while 48% oppose them. So while support for a robust public option is high, people are lukewarm about reform proposals as a whole. This attitude is mirrored in Congress.

The focus on cost has produced one victim already from our watch list: S. 1776, the Medicare Sustainable Growth Rate (SGR) fix. It proposed to fix the perennial moratorium on SGR. Originally intended to align physician fee growth with GDP growth, it would typically slice physician Medicare compensation. By providing no way to fund the $247 billion cost of S. 1776 and falling short of 60 votes (53-47), the Senate is guaranteeing that physician Medicare fees will be cut by 21% starting January 1. Fortunately as far as we know a fix is still included (and funded) in the House bill.

Because physicians, like patients, should win overall with reform. Pelosi will be counting the necessary 218 House votes to include a public option linked to Medicare rates (Medicare +5%) and she understands that physician participation in that public option is in the balance. We can’t have enrolled patients without doctors willing to treat them. This provision actually addresses those who don’t have political clout but provide the majority of care. Currently politically-controlled regional differences in Medicare rates mostly help bigger healthcare providers like hospitals, not the little guy.

The House seems to have everything just about wrapped up. But the Senate “Committee of Three” continues to negotiate a contentious combined bill that is taking increased heat from AARP and other groups for not making insurance affordable (meanwhile AARP is also campaigning for the SGR fix.) This could take a while. Meanwhile the enemies of reform are kicking into gear. Let’s not pretend that any bill will be perfect. We have plenty of different voices in our Change.org community that confirm that. But this opportunity for change won’t present itself again for a long time.

Have you heard of the “Delay, Define, Derail” campaign, courtesy of Rick Scott’s employee, insurance lobbyist Brian McManus? This strategy amounts to demanding a slow-down in the legislative process (um, this has been quick?) so a clear message can be developed to present whatever plan emerges as a combination of Medicare cuts, tax increases, higher insurance premiums and rising costs.

Funny, since the first is necessary just to keep Medicare operative under steep healthcare inflation. The second ignores our current indirect healthcare tax burden (wage stagnation or unemployment, benefits reduction, and paying more for less – if any – coverage.) And the last two have been accelerating unchecked for over 20 years. But with a coordinated messaging campaign, many people might buy it. With CEOs from all of the major private insurers meeting this week for the AHIP conference in D.C., they’ll certainly be putting their heads together.

So what’s the alternative to a public option? The most popular idea to try and rein private insurers in is the MLR – Medical Loss Ratio. This is supposed to be the amount that insurers pay in claims relative to total premium revenue. But it’s easily manipulated, as New York and Wendell Potter can attest. We’ve already tried tinkering around the edges, mostly with group plans. There’s the 12-18 month pre-existing condition exclusions, ERISA, COBRA, HIPAA plans … each time insurers wiggle around them by – you guessed it – raising premiums. Want to provide fair coverage for individuals? Guess what – more raised premiums.

Bottom line: the more time individual groups have to identify elements they dislike in bills containing a public option, and the more financial magic tricks in those bills, the less likely they are to pass. Who wins? No, not the non-Maine GOP. Private insurers do, because a large captive audience is safely within their profitable grasp. In contrast, Pelosi’s House bill saves money, covers more people AND includes providers as beneficiaries of reform. Pass it on.

Photo wolfsavard // CC BY 2.0