The Newly Released Public Option Proposal Will Reduce the Deficit by $68 Billion

Cross posted at the Wonk Room

Just when you thought the last nail had been driven in the public option coffin months ago, just like a phoenix rising from the ashes, the public option has once again returned to Congress.  As Noam Levey reported last night, “[c]reating a major government health insurance program was roundly rejected last year, but 128 House Democrats are pushing to reconsider the idea, contending that it would hold down federal spending.” The legislation, HR 5808, is sponsored by Rep. Lynn Woolsey (D-CA) and the 128 cosigners are largely progressive caucus members and include all three chairmen of the committees of jurisdiction, Ways and Means, Energy and Commerce, and Education and Labor.

The Congressional Budget Office (CBO) scored the legislation and noted some promising findings.  The public plan, in this form, has always been a deficit reducer and this is no exception.  CBO found the proposal would reduce the deficit by $68 billion from 2014 to 2020. Despite likely lower reimbursements than private plans, CBO found providers would likely participate in large numbers because of the number of enrollees. CBO estimates the average public plan premium would be 5 to 7 percent lower than other private plans available within the exchange, making it more affordable to individuals.  They also estimate approximately 13 million or one in every three individuals eligible for exchange coverage would chose the public option.

The legislation looks very similar to the original House public option that passed the Ways and Means and Education Labor committees. It is important to remember the public option that passed the full House of Representatives in November of last year looked very different from this initial version. Both the original House bill and the new legislation would create an option for a public plan within the health insurance exchanges beginning in 2014.  Providers would be paid Medicare rates plus 5 percent in the initial years.  The providers will not be required to accept Medicare to enroll in the program.

Realistically, this chances of this public option bill passing this Congress, who is exhausted from the last public option fight and in full midterm mode, are slim.  This hasn’t deflated Woolsey who said, “This will be there for the next Congress.” Whether or not this proposal goes anywhere legislatively, it reminds more progressive voters and members of the party that the public option has not been forgotten.  States have already begun showing support for public run insurance systems, this support from the federal government can work to galvanize the effort.

In comparison to the original House version of the public option, as CBO notes, some of the savings are not as large.  This is primarily due to the fact, “that total federal subsidies for exchange participants will be substantially smaller under PPACA than they would have been under the legislation that was considered in the House.”  In other words, because we  aren’t spending as much as we were with the original House bill, we can’t save as much.

In comparison to a very early Senate public plan option, this public plan would cover more individuals and premiums would be cheaper for individuals.  Providers would likely see lower rates which would make them not favor this plan.  A public plan with payments linked to Medicare was never an option for this Senate.

A summary table comparing the three public option proposals is below.

Initial House Proposal HR 3200, Summer 2009 (later became a negotiated rate system) Early Senate Proposal for HR 3590, November 2009 (public option later dropped) Woolsey HR 5808, July 2010
Deficit Reduction
Not separately scored – unofficial estimates had a savings of $110 billion $3 billion 2014-2020 $68 billion 2014-2020
Premiums 10 percent cheaper than private plans in the exchange More expensive than private plans in the exchange 5-7 percent cheaper than private plansin the exchange
Estimated number of individuals enrolling 9-10 million 3-4 million 13 million
Payment Medicare rates with +5% bonus in first three years for physicians enrolled in Medicare Negotiated rates with providers Medicare +5% bonus for first three years
Sexy Fact The public plan can negotiate drug prices from the start. Provider participation is voluntary. Healthier enrollees, states could opt out of the plan, start up costs must be repaid. State based exchanges with a federal Medicare linked payment system.
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4 Comments

Filed under Health Policy

4 responses to “The Newly Released Public Option Proposal Will Reduce the Deficit by $68 Billion

  1. A year ago I would’ve cheered this fight on. Now I’m bitterly disappointed that Progressives and Democrats sold us out to the for-profit industry. It’s going to make me sick to be forced to write a check to Blue Cross every month when I’m still worrying about how to pay the rent and keep my little home based business going.

    Dems and Progressives will have to do alot more than bring up an old horse like this and think a weary and disappointed populace will trust them anymore.

    The mandated coverage is going to cost me more than I can manage to pay. Even though I’ll get a subsidy my share will be over $100 a month based on the Kaiser Family Health Reform Subsidy Calculator at http://healthreform.kff.org/SubsidyCalculator.aspx

    I recommend everyone go there and see exactly how much this coverage will cost them. The deductibles on the mandated coverage will be about $2000 and yearly premiums will run the working poor like me at least another $1-2000 a year.

    I’m already rent poor and living on a not so healthy diet of breakfast cereal twice a day with one serving of a protein once a day (like eggs, tuna fish, or tofu). The rest of my diet is very carb/grain and fruit heavy. Most days I’m dragging myself around.

    According to Kaiser the basic policy for a single person will cost $10K in 2014. The for-profit industry must be happy about that.

    Progressives let this monstrosity pass and have tried to convince the people like me that we’ll just love this thing when we get to know it. Then near election time the Public Option is raised like a zombie from the grave and we’re supposed to be all optimistic again?

    2008 was over 2 years ago. This time I’m going to vote with my pocketbook and as a self-employed woman with a small business.

    I’ll do so strictly with my own welfare in mind since those I thought had my best interests at heart have proven weak, ineffectual, chaotic and spineless.

  2. jacksmith

    I’M PROUD OF YOU LABOR!. Keep standing up. The lives and health of all the American people and the World are in serious jeopardy.

    Further, unemployment healthcare benefits are critically needed. But they should be provided through the Medicare program at cost, less the 65% government premium subsidy provided now to private for profit health insurance.

    Congress should stop wasting hundreds of millions of dollars of taxpayer money on private for profit health insurance subsidies. Subsidies that cost the taxpayer 10x as much or more than Medicare does. Private for profit health insurance plans cost more. But provide dangerous and poorer quality patient care.

    It’s over. Tell congress to get the healthcare Merchants of death and injury out of the American peoples lives for good. 2010 is about THE PUBLIC OPTION!

    And that CORRUPT! UNDEMOCRATIC! filibuster must GO! NOW!

    Alan Grayson Honors The Dead http://www.youtube.com/watch?v=TV9TRoYMtjs&feature=player_embedded

    Alan Grayson on Healthcare http://www.youtube.com/watch?v=oPpQ2MNaSDo&feature=player_embedded

    Ron Sparks HealthCareReform http://youtu.be/kqlBFRJh4Cw

    John Garamendi – The Public Option http://www.youtube.com/watch?v=EyBTEke68aQ&feature=player_embedded

    I want to commend all of you for working so hard and being so strong at helping the whitehouse and congress begin to address our U.S. and Global healthcare crisis. You have been AWESOME! my fellow Americans and peoples of the World. America and the World is better and safer for it. My greatest pride is the knowledge that I am one of you. And that you really get it. You really understand the importance of it all.

    There are some potentially very good things in the healthcare legislation. Especially with the reconciliation fix’s. The Democrats, Bernie Sanders and the Whitehouse did a GREAT! job of fighting to produce the best healthcare legislation that they could. They have earned all our strong support. And we should give it to them.

    But it was your relentless pressure and hard work that made the difference. Whatever good comes from this healthcare legislation, America and the peoples of the World will have each of you to thank. You were smart, creative, courageous and relentless. You fought together for the best legislation possible. And when you had to, you fought alone. No matter who stumbled and fell you continued to push and forge ahead. Fighting for the lives and health of the American people and the World. YOU SHOULD BE PROUD OF YOUR-SELVES 🙂

    It may come to pass that future generations will look back on us and say that we were ALL Americas Greatest Generations. And that healthcare reform was our finest hour. You should be proud of our leaders President Obama, Speaker Pelosi, Majority Leader Reid and the many other Democratic and independent fighters for the people in congress. They proved them-self worthy of the leadership of a GREAT! PEOPLE.

    But we are not done yet. This was just the beginning of healthcare reform, not the end. WE THE PEOPLE OF THE UNITED STATES, ARE NOT! divided on healthcare legislation. The vast majority of you have been consistently crystal clear that this legislation does not go far enough. You want a strong Government-run Public Option CHOICE!! available to everyone on day one. And you want it NOW!

    YOU MUST NOT ALLOW AN INDIVIDUAL MANDATE TO STAND WITHOUT A STRONG GOVERNMENT-RUN PUBLIC OPTION CHOICE! AVAILABLE TO EVERYONE.

    WE THE PEOPLE have been crystal clear that we want an end to dependence on for-profit healthcare and the for-profit proxies called private for non-profit healthcare. The American people want the CHOICE! of a strong Government-run Public Option to replace their need or dependence on healthcare providers whose primary motivation is profit. Rather than providing the highest quality, easiest accessible and most affordable medically necessary healthcare possible. This is what the rest of the developed World has. And the American people want it too. They want healthcare ASSURANCE! Not, for-profit health insurance. And they want it NOW!

    Now is the time to continue the push for a strong Government-run Public Option CHOICE! available to everyone that wants it on day one. Rationally it’s clear what we have to do to get this done. SUPPORT THE DEMOCRATS that supported you with a Public Option choice, and REMOVE as many republicans as you can. Not one republican in congress was willing to step across the isle to support a strong Government-run Public Option CHOICE!! available to everyone on day one. NOT ONE! Let no candidate prevail this November that does not support a Strong Government-run Public Option.

    47,000 AMERICANS die each year from lack of healthcare. 120,000 die from treatable illness that don’t die in other developed countries. Hundreds of thousands of you are dieing from medical accidents in a rush to profit. And Millions of you are injured. Millions more are driven into bankruptcy. All for the privilege of paying two to three times as much as any other people in the developed world for healthcare. HOGWASH!

    Additionally, tens of thousands of you and your children were killed and millions sickened and injured from a terror attack with H1N1 (swine flu). Released on the American people and the World by the for-profit healthcare industry. All in an attempt to panic and frighten you into accepting the oxymoronic criminal enterprise of private for-profit healthcare (The most costly, deadly, dangerous, and disgraceful product sold in America). H1N1 is still sickening people and killing them. Especially children, the young and the middle aged. And there will be a third wave. These are the terrorist you need to worry about the most. Even the so-called international terrorist would not do something so INSANE! But greed driven medical profiteers would and did.

    Apparently as far as republicans in GOVERNMENT are concerned, YOU! my fellow Americans – CAN JUST DROP DEAD! Including their own family members. Fools!… Hundreds of thousands of you, and possibly millions of you will die from the long-term effects of your infection and poisoning with H1N1.

    So my fellow Human Beings. Rest-up, Take good care of the basics (Balanced nutrition, hydration, exercise, rest and POSITIVE emotional supports). Then wade back into the FIGHT! for a strong Government-run Public Option CHOICE! available to everyone on day one. Drug re-importation, Abolishment or strong restrictions on patents for biologic and prescription drugs. And government controlled and negotiated drug and medical cost. You must take back control of your healthcare system from the Medical Industrial Complex. You MUST do it NOW! This is a matter of National and Global security. There can be NO MORE EXCUSES.

    God Bless You My Fellow Human Beings. I’m glad to know of you. And proud to be one of you.

    See you on the battle field.

    Sincerely

    jacksmith – WorkingClass 🙂

  3. Pingback: The Newly Released Public Option Proposal Will Reduce the Deficit by $68 Billion - DC Progressive (blog) | HOME BASED BUSINESS FOR WOMAN

  4. Sandy Luster

    DOE BAD:
    The electric car projects are just a scam to get a certain group of VC’s to control the lithium fields in Afghanistan!

    Dmitry Medvedev Came to Silicon Valley on June 22, 2010 and met with some of the venture capital companies that helped lobby the leverage for the electric car companies that just got funded.

    Ener1 Battery Systems who got zillions of the dollars from DOE per the Loan Guarantee and ATVM Director Seward.

    Is controlled in part by Russian “business man” Boris Zingarevich.

    Who is best friends with the Russian Dmitry Medvedev, who arranged for all of Russia to extend current agreements signed with foreign automakers between 2005 and 2008 granting preferential duties on imported components for eight years in return for sourcing 30 percent of parts locally, the Industry and Trade Ministry said. Once those arrangements expire, the carmakers would need to commit to buying 60 percent of components in Russia within six years to get more tax breaks.

    Dmitry also appears to own interest in lots of Lithium processing and mining company technology in Russia which is pretty close to Afghanistan.

    Afghanistan is: the “Saudi Arabia’ of lithium”. American geologists have discovered huge mineral deposits (possibly $1 trillion worth) throughout Afghanistan, according to the New York Times. Lithium, gold, cobalt, copper, iron, among other valuable minerals are lying beneath what is already a war-torn country with little history with mining. Off and on over the decades, geologists—Soviet, Afghan, American—would investigate and chart some of Afghanistan’s mineral wealth, only to put the work on hold as violent conflict erupted. Now, corruption, in-fighting between the central and district governments, foreign interests, and greater zeal from the Taliban might come into play to disrupt a potential economy evolving around these natural resources. With the Ministry of Mines, a Pentagon task force is now helping organize a way of handling the mineral development and bidding rights. How this unfolds socially, environmentally and politically should be interesting.

    The New York Times reports: The value of the newly discovered mineral deposits dwarfs the size of Afghanistan’s existing war-bedraggled economy, which is based largely on opium production and narcotics trafficking as well as aid from the United States and other industrialized countries. Afghanistan’s gross domestic product is only about $12 billion. The two most prevalent minerals are copper and iron. Niobium, used for making superconducting steel, has also been found.

    The effort to get that money for Ener1 was strong armed by Republican Sen. Richard G. Lugar, one of the deans of Congress, and his junior colleague, Democratic Sen. Evan Bayh.

    Richard Lugar and Lachlan Seward co-managed the Chrysler Bail-out.

    Lachlan Seward was appointed by George Bush to run all of the tens of billions for the DOE ATVM and Loan Guarantee Programs. He & Matt Rogers gave most of the money away to their closely aligned interests and negated competing applicants. —

    Another place near Afghanistan that there is lot’s of Lithium is in Mongolia. Blum Capital has targeted the Lithium fields in Mongolia, said to be the second largest fields after Afghanistan in the region. Mongolia touches Russia so mining and equipment access could first take place there via Russia. China wants the Mongolian Lithium too so there is some two-way bidding that each country (Russia and China) do not know about. The owner of Blum Capital is Senator Feinsteins husband. She recently made him the Goodwill Ambassador to Mongolia.

    Blum’s wife, Senator Dianne Feinstein, has received scrutiny due to her husband’s government contracts and extensive business dealings with China and her past votes on trade issues with the country. Blum has denied any wrongdoing, however. Critics have argued that business contracts with the US government awarded to a company (Perini) controlled by Blum may raise a potential conflict-of-interest issue with the voting and policy activities of his wife. URS Corp, which Blum had a substantial stake in, bought EG&G, a leading provider of technical services and management to the U.S. military, from The Carlyle Group in 2002; EG&G subsequently won a $600m defense contract. In 2009 it was reported that Blum’s wife Sen. Dianne Feinstein introduced legislation to provide $25 billion in taxpayer money to the Federal Deposit Insurance Corp, a government agency that had recently awarded her husband’s real estate firm, CB Richard Ellis, what the Washington Times called “a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.” In 2009 the University of California Board of Regents, of which Blum is a member, voted to increase student registration fees (roughly the Univ. of California equivalent of tuition) by 32%. Shortly thereafter, Blum Capital Partners purchased additional stock in ITT Tech, a for-profit educational institution. These events suggest a conflict of interest on Blum’s part. Also see: http://la.indymedia.org/news/2010/09/242044.php and http://www.floppingaces.net/2007/04/02/the-silence-on-the-feinstein-c/ and http://www.washingtontimes.com/news/2009/apr/21/senate-husbands-firm-cashes-in-on-crisis/

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