What Real Compromise Looks Like

A vast majority of Democrats in Congress want health care reform to include a robust public option. As I have discussed Conrad/Ross' co-ops and Snowe's trigger are not in any way compromises. They are fig leaves. The vast majority of Conrad's state based co-ops have too many restrictions and would be too small (by Conrad's definition) to ever work except in a handful of states. A trigger can too easily be made useless. As Robert Reich pointed out, the whole reason Washington DC is filled with lobbyists is to slowly and quietly kill things like a trigger. They would do nothing except make it look like Democrats had not given up on the key promise of a public option. They are not compromises; they are surrender and capitulation. Real compromise would at least try to address all or some of the reason why progressives want a public option.

Overhead, Waste, and Cost

Health care is too important and too expensive. To the extent possible, every dollar spent on premiums should be used for treatments and not for CEO bonuses or excessive corporate profits. Progressives believe that if the government is going to spend hundreds of billions expanding coverage and force individuals to pay hundreds of billions more, the nation needs assurances that their money will be well spent. A public option would provide a strong alternative with very little overhead. This issue can be partly addressed by setting a minimum medical loss ratio of 92%. Any insurer who wants to use the exchange must spend at least 92 cents of every premium dollar on medical treatments.

Another option that could be used instead of or in addition to a minimum medical loss ratio is to only allow not-for-profit insurance to be sold on the exchange. This is very similar to how health insurance is done is Switzerland. It would have the added benefit of possibly making at least a few new non-profit insurance co-ops viable.

Guarantee for Vulnerable Groups

Progressives are not convinced that insurance companies will ever work for the needs of groups that tend to have the highest medical bills. Even if the new exchange as a whole works well there is still a great fear that traditionally vulnerable groups will continue to fall through the cracks. Two groups, individuals close to the poverty line and individuals very close to retirement should at minimum be guaranteed access to at least one decent insurance option structured for their needs. If it is not a public option it should be existing government programs.

This could be improved with two ideas from Senator Baucus. Baucus originally proposed the idea of allowing older Americans (55-64) currently without insurance the option of buying into Medicare by paying full price premiums. This is a good idea progressives could support. Senator Baucus has also proposed allowing individuals on the exchange making between 100%-133% of the federal poverty line the option of Medicaid or equal value tax credits to buy private insurance. This idea should be expanded to individuals making between 100%-230% of the FPL. People between 133%-230% would need to pay a sliding scale premium for Medicaid.

Benchmark

The public option is meant to be a benchmark. A transparent public option would give individuals, politicians, and policy experts something to compare the effectiveness of private insurers against. Allowing people who don't have insurance and are over 50 years old the option of buying into Medicare would at least provide some form of a benchmark. Giving a small segment of people using the exchange the option of buying Medicare or Medicaid will let us see if private insurers are able or not to more effectively provide them with coverage.


Setting a minimum floor for medical loss ratios on the exchange of 92% would be a good idea. Only allowing non-profit insurance companies to sell policies on the exchange should eliminate some of the pressure to adopt anti-consumer practices. Providing a small group of uninsured Americans close to retirement the option to buy into Medicare early by paying full premiums is smart policy. Giving individuals without insurance making between 100%-230% of the FPL the choice of private insurance on the exchange or the option to use their tax credits to buy into Medicaid would provide continuity of insurance and a guarantee of decent coverage for an often vulnerable group of Americans.

A combination of all of these ideas would fulfill at least some of the goals of a public option. This is what compromise looks like. It is finding different ways to achieve some of your goals. Unfortunately, you will not hear this ideas discussed. Most politicians who oppose the public option are really opposing any efforts to stop private insurance companies from overcharging the American people. It does not matter if it is a public option or some new pricing regulations. If it hurts the bottom line of private insurance companies they will oppose it. Triggers and small state based co-ops are useless face saving measures. They will not discipline private insurance companies or bring down cost. They are not a compromises; they are surrender.