New Grand Health Care Compromise to Include Medicare Buy-In, Expanded Medicaid, Better Loss Ratios - Where Have I Heard This Before?

Several months ago, before I started working for FDL, I tried to imagine a theoretical set of compromises that would be an acceptable alternative to the public option. My goal was to come up with a set of proposal that combined could do roughly 80% of what the public option was meant to accomplish. It was a simple thought experiment to show that the “conservative” Democrats were really opposed to holding the insurance companies accountable, and not the idea of a public health insurance option. (Little did I know that I was single-handedly reconstructing health care reform.) My plan had exactly four planks, and, perhaps eerily, the new "grand compromise" is made up, nearly entirely, of the same four ideas.

The goal of the public option was to reduce waste and overhead, guarantee that the least healthy and most vulnerable Americans have access to a health insurance plans structured for their needs, and create a public benchmark on the exchange by which we can judge the private insurance companies.

I proposed a medical loss ratio of 92%; the possible grand compromise has a medical loss ratio of 90%:

A third liberal proposal would require insurers to spend a specified share of premiums — about 90 percent — on clinical services and activities that improve the quality of care. This would, in effect, limit the profits that insurers could make.

I suggested all plans on the new exchange must be non-profit, like in Switzerland; the possible grand compromise would create another national OPM-run exchange only for non-profit insurance companies:

There appeared to be serious consideration of a new proposal on the table: a national health plan similar to the Federal Employee Health Benefits Plan, which provides insurance to members of Congress and federal workers. It would be administered by the Office of Personnel Management, which oversees the federal plan, and all of the insurance options would be not-for-profit.

The third idea was to allowing people between 55-64 to buy-in early to Medicare--exactly as in the new compromise:

liberals are pressing to add other coverage options to the bill, including a provision that would allow individuals to buy into Medicare starting at age 55.

The final provision of mine was to expand the Senate Finance Committee bill's option of buying into Medicaid for everyone between 100-133% FPL to everyone between 100-230% of FPL – The compromise will likely contain some expansion of Medicaid buy in (to 150% FPL or greater), although the exact income cap has not been determined.

Another proposal on the table would permit more low-income Americans to join Medicaid, beyond the historic expansion already provided for in both the House and Senate bills.

The grand compromise possibly being discussed is frighteningly similar to my theoretical compromise, although it is noticeably weaker. The medical loss ratio is slightly lower, the Medicaid buy in is probably more limited, and only the new OPM exchange would require participating insurance companies to be non-profit (unlike my plan to make it that way for all exchanges). I'm extremely doubtful this new grand compromise will get 60 votes, and it is already too weak. All the pieces work in tandem; if one is weakened or removed, the whole compromise quickly becomes a worthless alternative compared to a public option. If the grand compromise I orginally invented does hold up, however, Harry Reid, Barack Obama, and the Senate Democrats could have saved themselves lot of heart burn by hiring me four months ago.

My next step will be world domination.