The 6 Word Change That Could Save Health Care Reform And The Public Plan

Providing subsidies to help Americans afford health insurance is the single biggest cost driver in health care reform. The CBO calculates that the subsides in the House bill would cost $773 billion, and in the Senate HELP Committee bill they would cost $723 billion.

There are several ways to reduce the cost of those subsidies. You can further restrict who would qualify for subsidies, reduce the size of the subsidies, reduce what is considered minimum health insurance benefits, reduce the minimum actuary cost sharing, or change how you calculate the size of the subsidies.

Changing how you calculate the size of the subsidies seems to me the single best minor change to reducing the cost of health care reform. It would also dramatically strengthen the case for, and the cost savings from, a robust Medicare-like public option.

Currently both the House bill and the Senate HELP Committee bill calculate the size of the subsidies based on the “reference premium,” which is equal to “the average premium for the 3 basic plans in the area for the plan year with the lowest premium levels.” Lowering the price of the “reference premium” would dramatically reduce the cost of reform.

By simply redefining the “reference premium” to be equal to the premium of the lowest cost basic plan offered, it would substantially reduce the overall cost of health care reform. It would also dramatically increase the savings that result from the public plan proposed by the House Democrats.

The CBO concluded that the House's public plan would on average be “about 10 percent cheaper than a typical private plan offered in the exchanges.” It has also been reported that the public plan in its current form reduced the cost of the House's bill by $150 billion.

I'm assuming that since the public plan would be 10% cheaper it would reduce the size of the reference premium by 3.3%. I'm also assuming that the 3.3% reduction in the reference premium is responsible for the public plan reducing the cost of health care reform by roughly $150 billion.

If that is the case, redefining the “reference premium” to mean the premium of the lowest cost basic plan (which would be the public option) would farther reduce the cost of health care reform by roughly another $250 billion. Progressives should push for redefining the term “reference premium” as their solution for reducing the cost of the bill. It would not only produce dramatic savings but it would also make it harder to remove or change the public option in the House bill.

There is an expected change to the accounting rule dealing with Medicare payment rates, which would reduce the price tag of the House bill by $245 billion. Combined with the change I outlined above the cost of the House bill could be cut almost in half.

1 comment:

jacksmith said...


It’s official. America and the World are now in a GLOBAL PANDEMIC. A World EPIDEMIC with potential catastrophic consequences for ALL of the American people. The first PANDEMIC in 41 years. And WE THE PEOPLE OF THE UNITED STATES will have to face this PANDEMIC with the 37th worst quality of healthcare in the developed World.


We spend over twice as much of our GDP on healthcare as any other country in the World. And Individual American spend about ten times as much out of pocket on healthcare as any other people in the World. All because of GREED! And the PRIVATE FOR PROFIT healthcare system in America.

And while all this is going on, some members of congress seem mostly concern about how to protect the corporate PROFITS! of our GREED DRIVEN, PRIVATE FOR PROFIT NATIONAL DISGRACE. A PRIVATE FOR PROFIT DISGRACE that is in fact, totally valueless to the public health. And a detriment to national security, public safety, and the public health.

Progressive democrats the Tri-Caucus and others should stand firm in their demand for a robust government-run public option for all Americans, with all of the minimum requirements progressive democrats demanded. If congress can not pass a robust public option with at least 51 votes and all robust minimum requirements, congress should immediately move to scrap healthcare reform and request that President Obama declare a state of NATIONAL HEALTHCARE EMERGENCY! Seizing and replacing all PRIVATE FOR PROFIT health insurance plans with the immediate implementation of National Healthcare for all Americans under the provisions of HR676 (A Single-payer National Healthcare Plan For All).

Coverage can begin immediately through our current medicare system. With immediate expansion through recruitment of displaced workers from the canceled private sector insurance industry. Funding can also begin immediately by substitution of payroll deductions for private insurance plans with payroll deductions for the national healthcare plan. This is what the vast majority of the American people want. And this is what all objective experts unanimously agree would be the best, and most cost effective for the American people and our economy.

In Mexico on average people who received medical care for A-H1N1 (Swine Flu) with in 3 days survived. People who did not receive medical care until 7 days or more died. This has been the same results in the US. But 50 million Americans don’t even have any healthcare coverage. And at least 200 million of you with insurance could not get in to see your private insurance plans doctors in 2 or 3 days, even if your life depended on it. WHICH IT DOES!

If President Obama has to declare a NATIONAL STATE OF EMERGENCY to rescue the American people from our healthcare crisis, he will need all the sustained support you can give him. STICK WITH HIM! He’s doing a brilliant job.



Join the fight.

Contact congress and your representatives NOW! AND SPREAD THE WORD!

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God Bless You



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