A public plan private plans can live with?

From where I sit, the most exciting aspect of the healthcare reform debate is the discussion around a public plan that would compete with private plans. So I was interested to read that Senate Finance Committee members Olympia Snow (R-ME) and Charles Schumer (D-NY) appear to be negotiating a compromise bipartisan agreement that would establish a public plan –but do so in a way that would be less frightening for private insurance companies.

According to Citi:

Private insurers would bid state-to-state on a standardized benefit package (similar to the Federal Employees Health Benefits Plan or FEHB). Only if private plans aren’t deemed “affordable” (even after a re-bid opportunity) would a “safety net” public plan option (run by either Health and Human Services or a new government entity) step in to provide coverage. Current expectations are for these plans to be up and running by 2013.

This proposal is analogous to some of the health plan regulation language in the health plan Obama campaigned on. In that plan, Obama advocated regulating medical loss ratios in states where there was insufficient competition among plans.

I don’t know whether the compromise will succeed but it seems like a reasonable way to give something to everyone.

June 24, 2009

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