Reid's Public Option Is Nearly Identical To The Senate HELP Committee Public Option

Harry Reid took the public option nearly unchanged from the Senate HELP committee Bill and put it in the merged bill. It is called the “Community Health Insurance Option.” Besides the addition of a very bad, unlimited, pre-reform opt-out provision, Reid made almost no changes.

The only changes besides the addition of the opt-out provision are as following: Reid decided to not include three provisions that were found in the HELP bill. They dealt with creating an ombudsman for the plan, a risk corridor for contracting agencies, and a provision dealing with the issue of physicians collectively negotiating rates. The provisions removed are listed below:
`(D) PHYSICIAN NEGOTIATED RATES- Nothing in this paragraph shall prohibit the application of a State law that permits physicians to jointly negotiate with health plans. In such State, physicians may jointly negotiate with a community health insurance option concerning rates paid by the option.
`(9) OMBUDSMAN- In establishing community health insurance options, the Secretary shall establish an ombudsman or similar mechanism to provide assistance to consumers with respect to disputes, grievances, or appeals.

`(A) IN GENERAL- In any case in which the Secretary has entered into a contract with a contracting administrator, the Secretary shall use amounts contained in the Start-Up Fund to make risk corridor payments to such administrator during the 2-year period beginning on the date on which such administrator enters into a contract under subsection (e). Such payments shall be based on the risk corridors in effect during fiscal years 2006 and 2007 for making payments under section 1860D-15(e) of the Social Security Act.

`(B) SUBSEQUENT YEAR- In years after the expiration of the period referred to in subparagraph (A), the Secretary may extend or increase the risk corridors and payments provided for under subparagraph (A).

`(C) AMOUNT USED TO REDUCE COSTS- The Secretary shall deposit any payments received from a contracting administrator under subparagraph (A) into the Start-Up Fund.

Overall the changes are minor, and may have zero effect. I believe other provisions in the bill made “physician negotiated rates” unnecessarily redundant. Removing the ombudsman provision doesn't really make sense, although I guess there is nothing stopping the public option from creating such a position if it wanted.

Besides the bad design of the opt-out provision, the actual structure of the public option is stronger than I feared it might have been. It is good to see that Reid decided to keep the administrative structure of the HELP public option nearly unchanged.

Since the public option in the merged bill is indeed nearly identical to the HELP public option, my side by side comparison of the Senate public option and the House public option is still valid. They both have a very similar administrative structure.

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