I like Wyden’s proposal. Kudos to him for proposing and pushing it. I hope he can work out the wrinkles (preventing adverse selection).

Giving people choices is good in and of itself, but choices also create important market forces for cost containment, quality improvement, and innovation. I am strongly for a national public option but do not think it will necessarily be less costly. It will give people another choice.

I am concerned about the financing of the $1 trillion in additional costs. I’m OK with the new taxes. But financing half of the $1 trillion with Medicare cost savings, as I understand stand it, seems like a fraud. The Medicare cost savings are needed to keep Medicare solvent, not to subsidize care to new group of people.

Admiral asked: Do the self-employed get the public option?

Under the proposals moving forward now, yes, self-employed and certain small businesses would automatically move into the Health Exchange - where they could choose between various private insurance options and the public option.

Roberts claimed: ...will have to move to the public option.

No, they'll have to move to the Health Exchange, where they could choose between various private insurance options and the public option.

Alcatross hyperventilated: ...everyone will get to choose the public option soon enough - because there won't be any other choice.

Wrong again. If your employer drops your insurance, then you'll move into the Health Exchange, where you can choose between various private insurance options and the public option.

Dave Porter made a reasonable point about competition, and then said: "I am concerned about the financing of the $1 trillion in additional costs."

I'm not. $100 billion a year isn't that much in a $6+ trillion budget. Paraphrasing Barney Frank from a few years ago, when he was asked where he'd find the money for health reform, he said: "From under whatever rock they found the money for the war. Why is there always money for war, but never any money for health care? We'll figure it out."

Kurt, you make a good point about the headaches that employers face -- which is why I believe that Wyden's original plan to abolish employer-based health care was the right idea, even if Obama thinks it's politically too "radical". That said, remember as I've repeated above, folks won't move into the public option. They'll move into the Health Exchange, where the public option will be just that -- an option among many choices.

MP, I don't know the details of the play-or-pay proposal, but I'd expect that the employer contribution to be a per-person cost that's roughly on par with the cost of providing health care, rather than a payroll tax that lets low-wage employers (Wal-Mart) off easy while hitting high-wage employers (like law firms and tech companies) comparatively harder.

Oh, and I should have mentioned: My firm built Ron Wyden's campaign website, but I speak only for myself.

When businesses do the math and discover that the public option costs them less than maintaining their privately purchased plans they will voluntarily cancel their plans and their employees will have to move to the public option.

Boy, people sure seem to have a lot of certainty about what a public option will look like considering we don't have one yet.

My own view is that, assuming we end up with a public option, it will neither live up to the hopes of its advocates or the fears of its critics. In fact, it will probably end up looking a lot like private health plans.

Why do I say that? For the same reason that public utilities look a lot like private utilities (absent the artificial public-power preference from BPA) and that public schools look a lot like private schools (absent the self-selected student bodies of the latter).

In the end, there are only so many different ways of delivering these services and there is no magic wand labeled "public" or "nonprofit" that cures all the ills we think we see in the current system.

In the end, there are only so many different ways of delivering these services and there is no magic wand labeled "public" or "nonprofit" that cures all the ills we think we see in the current system.

Yeah, I think that's basically right - though more of a focus on prevention (ala Kaiser Permanente) would be a good thing.

The biggest changes to the health care system to look forward to are universality and competition. We don't have either right now, and both changes would create the robust and free marketplace that conservatives claim that they worship.

The biggest changes to the health care system to look forward to are universality and competition.

And the key to both of those is the elimination of pre-existing health conditions as a basis to exclude people from coverage or risk-rate their premiums (which in some cases in tantamount to the same thing).

In a system where everyone is basically part of one big risk pool, and insurers can't cream off the healthiest people with the lowest risks, they will have to compete on rates and coverage in order to spread the risk among the largest and most representative pool possible.

Fortunately, this is part of every plan being seriously proposed. That--plus the mandatory coverage you mentioned--starts to get us in the neighborhood of a system that will actually work.

I and a couple other people have read Cohn's piece multiple times and still don't parse his thesis very well. The question I have is, is this an add-on to existing House or Senate reform bills, or an add-on to HAA? If it's the latter, are we talking about the same general features of the public choice as represented in (ideally) HR676? I can't tell what process he's proposing to graft this onto.

As I understand it, the initial coverage in the HELP Senate bill goes to those at or below 133% of poverty, likely straight into Medicaid. Also eligible for public plans would be those self-employed, currently not covered, or employed by a business with 25 or fewer employees, regardless of prior coverage. That would be expanded to 50 employees the following year, and there are provisions--vague, granted--for inclusion among larger employers as well. Subsidies would taper off and end at 400% of poverty. (One valid concern I've heard about this concept is that there's a harsh donut hole for individuals making right at that 40K-50 level, many of whom will find $400 or more a month too steep to sign up for).

What's the definition of small business in OR when "they" say that 70+% of Oregon's workers are in those small businesses? What percentage of large-employer Oregonians don't have health care of any kind? Darned few. Is priority one above all making sure people who aren't covered can be, or improving the health care of the much larger group who are covered already? Both are crucial goals.

So before we talk about the theoretically natural desire for 100% access, it's worth doing what Cohn and Klein do: present both policy and political realities working against it. All I get from the BlueO piece here is Wyden cheerleading.

I think there's a decent case to be made that the effects of a FRPO available for a limited number of Americans initially will spill over into the private plans of corporate America as well. This would, in effect, give workers unable to take advantage of the exchange (not to mention their employers) the opportunity to benefit from the downward pressure applied by the public plans. Of which I understand four tiers have been proposed: basic, plus, premium and premium plus, with user cost/subsidy ratios varying for the different coverage levels.

Allowing 100% access would have two potentially chaotic impacts: first, while I scoff at the idea of a public option "killing" the insurance industry, any risk of that is enhanced if dozens of millions of people drop like flies off private rolls in a short period of time. I have no problem with pushing insurers to gradually reduce their structure to handle lower profit margins, but it may not be fair to throw reality at them all at once--and would have real-world costs to a lot of relatively innocent people who work for these evil outfits because they have to survive.

So there's that. The other issue riding shotgun is that we're probably not served well by an onrush into the public system, any more than a rush away from the private system. Setting up a health exchange in the bureaucratic mess of a current system will take years, which is why regretfully 2012 or 2013 is probably the first time we should see the exchange open. But if you flood it with people at startup, you'll not only shock the federal budget but likely offer really lousy care until the kinks are worked out.

As Cohn says, it's a no-brainer--right? Well, maybe not.

Not doctors, TID. Nurse Practitioners. People doing preventative work so that we have more $50 annual checkups, and fewer $50,000 heart bypass surgeries.

Kari, on the point of paying for health care reform, roughly $500 billion over ten years, or $50 billion per year, is proposed to come from Medicare cost savings, as I understand the proposals. This is a shell game, a hoax, and fraud. Those savings are needed to keep Medicare functioning in the black.

We are running up enormous deficits with the various stimulus bills. And I think we need more. But someday we have to pay them off. We may get to decide when that day comes, or someone else, like the Chinese, may decide for us.

Yes, we could cut the defense budget and pay for health care. I’m for substantial defense cuts. On my own blog, I’ve agreed with the NY Times on cutting $20 billion (here), on cutting missile defense (here) and on cutting the F-22 program (here). But cutting defense programs is as hard as cutting the non-taxable income aspect of health benefits. As we write, the F-22 program is before the Senate. Obama has threatened to veto the Defense Authorization bill over, as the NY Times puts it, “the wasting of $1.75 billion on seven additional F-22 fighter jets that the Pentagon says it neither wants nor needs.” (here) The problem Senators include Senators Kennedy and Kerry. Think of that! And this is a tiny cut!

I’d also note, on my constant issue, that China, or the fear of conflict with China, is the justification for at least half of the Defense Department budget (all the big war weapons systems). Our failure in Oregon, and elsewhere, of course, to engage China through educational programs (Mandarin and study abroad programs) makes it more likely that those big war weapons systems might be needed. Bye, bye defense budget cuts.

I and a couple other people have read Cohn's piece multiple times and still don't parse his thesis very well. The question I have is, is this an add-on to existing House or Senate reform bills, or an add-on to HAA?

Trouble with reading comprehension, TJ? Try again. I'll make it easy:

[The Healthy Americans Act is] unlikely to be the basis for congressional action, in no small part because it's got critics on both the left and the right. Wyden, though, hasn’t given up on trying to influence legislation. The Healthy Americans Act would give everybody, not just a select few, the chance to choose from among a set of insurance plans. Now he's trying to save that feature, among others, by grafting it onto to legislation moving through Congress already.

Or maybe it's that you're checked out of the latest news. The Senate HELP Committee has now voted a health care bill out of committee. We've moved past theoretical discussions and into legislation that's moving fast -- according to the President's timetable, initial passage in the House and Senate by the August recess.

Backbeat -- Single payer advocates are going nowhere, since there are less than a half-dozen Senators for single-payer. But single-payer advocates should be fighting hard for a public-option that every American can choose.

In essence, the public option would allow you to choose single-payer for yourself.

"

Trouble with reading comprehension, TJ? Try again. I'll make it easy:

[The Healthy Americans Act is] unlikely to be the basis for congressional action, in no small part because it's got critics on both the left and the right. Wyden, though, hasn’t given up on trying to influence legislation. The Healthy Americans Act would give everybody, not just a select few, the chance to choose from among a set of insurance plans. Now he's trying to save that feature, among others, by grafting it onto to legislation moving through Congress already.

Or maybe it's that you're checked out of the latest news. The Senate HELP Committee has now voted a health care bill out of committee. We've moved past theoretical discussions and into legislation that's moving fast -- according to the President's timetable, initial passage in the House and Senate by the August recess.

Nice shot at condescension, although it's interesting that you don't address any of the substance of what I said.

The paragraph you cite is unclear, because it opines that something is unlikely, then counters that Wyden isn't giving up--something that has been true of his position on HAA for so long. His bill has been questionable for quite some time, politically, so to say he's not giving up on influencing legislation, did not (to me) indicate one way or the other.

Further, to say his bill is not "moving through Congress," when he and his spokesperson have spent literally months talking up its viability through cosponsorship, is also not a particularly clear statement.

I'm well aware of the HELP committee bill, as well as the House version--thank you. I've been covering the issue a lot more recently than you have, I think.

As a final aside on the topic, I said I and others didn't parse his THESIS. I went on to discuss my confusion about what Wyden intended, which perhaps itself was an unclear juxtaposition, but also problematic is the way Cohn introduces it, sounds favorable,--then discusses the problems with it (which you seem to avoid), then says they're problems for Wyden...but hey, he's crafty and so maybe he'll work them out.

[Response to off-topic comment removed. -editor.]

TJ, are you deliberately trying to be dense?

Try again:

The Healthy Americans Act would give everybody, not just a select few, the chance to choose from among a set of insurance plans. Now he's trying to save that feature, among others, by grafting it onto to legislation moving through Congress already.

The HAA has a unique feature, says Cohn. That feature is the "chance to choose from among a set". Cohn says Wyden is "trying to save that feature" by "grafting it onto legislation".

He's CLEARLY not talking about the Healthy Americans Act. He's quite clearly talking about the legislation that's "moving through Congress" -- which is a term of art that means, legislation that is getting work sessions and committee votes - which the HAA is not.

How about addressing the substance of the matter, rather than complaining about the writing style of someone who I've quoted.

Do you believe that every American should have the right to select the public option (or any of the private options in the health exchange) if they don't like the health insurance that their employer chooses for them?

"How about addressing the substance of the matter, rather than complaining about the writing style of someone who I've quoted.

Do you believe that every American should have the right to select the public option (or any of the private options in the health exchange) if they don't like the health insurance that their employer chooses for them?"

Don't you think it's a little weird to accuse me of not addressing the substance, when you chose the one point entirely divorced from policy aspects to reply to me at first?

And the answer is no, not with the bills currently on the table, not right away. The employer always has the right to change providers, and one of my (substantive) points was that even a limited-access public option can cause price depression in the private sector. Eliminating state by state oligarchies is also a goal of existing legislation, which stands to have the same effect.

Am I OK with phase-in? Yes. Do I think eventually every American should have an option for public insurance? Yes. Is it pragmatic, financially savvy or politically plausible now? I don't think so. We've taken single payer off the table; short of simply shutting down the private insurance industry like a light switch, they're going to have to coexist and be carefully balanced for the near future.

A universal mandate is critical for getting 20-something males (who think they're bulletproof) into the system.

Ah the truth comes out!

Universal health care will be paid for on the backs of struggling, 20 something males, fresh out of school making low wages while trying to pay back massive student loan debt.

Seriously,

The key is to sever the relationship between employment and health care. It is the only way to truly reform the system and save money over the long haul. Otherwise "reform" will not save money, it will cost more money.

I don't like any kind of employer mandates. They are a burden on our economy and employers. Plus since you always have to exempt the self employed or very small businesses with few employees, you will never achieve universal coverage that way, without stifling small business. Also, employer provided insurance means it is not portable and you lose it and have to change plans if you lose or change your job. That is a deal breaker for me.

There are only two realistic options: A Medicare for all public option, or a Wyden style universal individual mandate to purchase subsidized health insurance, financed by eliminating the tax exemption for employer provided health insurance.

Let union member health insurance provided by employers through their collective bargaining agreements be grandfathered in, until the agreements expire. Then they are in the same boat as everyone else.

Joe,

Are you being stupid, or lying? Nothing anyone is proposing says you have to buy your private insurance through the mooted exchange, there would be private insurance both inside and outside of the private exchange. Which is why Jack Roberts is wrong about cherry-picking.

Joe, O.k., thanks for the ref, very interesting. I retract my rhetorical fork about stupidity & lying & apologize. I'm not sure of the context of the section you quote, but even if you're misinterpreting, it would be a reasonable misinterpretation, and you may not be.

Kari,

Thank you for raising the important issue that most Democratic leaders have shifted even their rhetorical focus from choice to preserving the private insurance industry. This is an important piece of truth-telling, unfortunately unusual among public plan advocates. Instead, as Cohn writes, "Obama and his allies are (understandably) focused on getting whatever they can through Congress."

Actually I don't think it is understandable. Anything is not always better than nothing. We are getting down to the level of "don't let the mediocre be the enemy of the stupid and ineffective."

One reason the move away from choice rhetoric matters is that lack of choice of plans has been a key accusation that public plan advocates have thrown at single payer ideas. The accusation has been mendacious, of course, ignoring wider choice of providers under single payer and increase of choice for many, including many nominally "covered" by actuarial insurance, due to the end of price-based rationing.

Kari,

For somewhat similar reasons to why a public plan is categorically different from a health provision payment system, what Wyden is trying to do, if Cohn is right, really isn't "saving a feature" of the HAA. It's fundamentally different.

The proposal on which Cohn focuses, essentially creating a voucher system for current employer provided benefits, is superficially similar in that employers lose control of employee plan choices.

But it does not make the much deeper change of detaching insurance access from your current employer. Under HAA if you lost your job or changed your job your insurance wouldn't change as a direct result.

It is also quite hard to see how the voucher proposal would work with the current system of employer-based group plans. The premiums for such plans are negotiated among by employers or groups of employers with insurers based in part on the size of the employee pool and then renegotiated periodically based on "experience rating" i.e. how many services covered members use (I am not sure how much aggregated actuarial characteristics may enter into such negotiations). How much an employer contributes to the premium also changes. One fairly typical approach is to base the contribution on the cost or a percentage of the cost of the least expensive plan offered per category (say individual, employee plus one, or family).

If individual employees can opt out of the employers' "group" that is going to make the price/premium negotiations a lot harder even to carry out, which in turn will make it hard to figure out how big the "voucher" should be, insofar as the employer contribution may depend on the price/premium negotiation.

Such opt-out also will tend to drive up insurance prices because insofar as groups get smaller and reduce bargaining power and risk pools.

Joe,

Page 16 of the House Draft Bill sets out conditions for continuation of existing individual insurance plans, including provision that new dependents may be added to them, outside of the Exchange proposed in the bill.

If you look at p. 19, you will see that it provides that any new individual insurance plans must operate within the Exchange & thus are subject to greater regulation than employer or other group plans that operate outside of the Exchange. From p. 16's restriction on existing plans enrolling new members apart from new dependents of existing members, this also means that anyone else seeking new enrollment in an individual plans must enroll in an individual plan that is offered through the Exchange.

So individual insurance plans would not be not outlawed, but insurers would be restricted in how they could offer them.

It is not clear to me yet how much greater the restrictions for Exchange plans would be under the draft than those imposed on "Qualified Health Benefit Plans" (of which Exchange plans would be a subset). Nor do I yet understand if non-"Qualified" plans would be permitted, and if so, what privileges or advantages might extend to "Qualified" plans but not others (e.g. perhaps tax benefits?).

Joe: So, in effect private coverage would be illegal because any new coverage must be thru the Federal Exchange.

This is a serious misinterpretation of "the Exchange," implying that all coverage offered through it ipso facto is "public." 'T'aint so, and it's just not true to say that the law makes private individual insurance "illegal." Too regulated one could argue, illegal is just untrue.

Such an "exchange" (or "gateway" per Massachusetts [Mitt Romney], or "state Health Aid Agency" [Ron Wyden]) is a combination of a market-making institution, c.f. stock exchange, which brings sellers and buyers together, a marketing tool, and a regulatory device.

Object to excessive regulation if you like. But private individual insurance plans would be perfectly legal. They could be offered through the Exchange, and would be private and for profit.

The Draft Bill reportedly envisions at least four levels of benefit floors & "individual responsibility" contribution levels (e.g. not just premiums but deductibles & co-pays) defining categories with "the Exchange." I have not seen this myself yet.

This appears to allow private insurers within the exchange considerable latitude in designing individual plans to appeal to differing individual calculations of risk, affordability and desired security according to ability to pay, for those relatively few able to afford individual rates.

Private group and employer plans need not be in "the Exchange" under the Draft. The must meet certain criteria to be "Qualified." I still don't know what that means.