Bingaman: Carper’s State-Based Public Option “Compromise” is Not a Plan, It’s the Status Quo

Last week a one-page plan from Sen. Carper was being circulated around the Senate. His public option “compromise” was to “let” states set up very weak, highly restricted, state-based public options if they wanted to. The problem is that this is not compromise. Any state could technically set up a public option right now if they wanted. It seems that at least Sen. Bingaman knows that this “compromise” is meaningless.

My initial reaction was, states have the authority right now, if they want to establish a so-called public option within their state, there's no prohibition against that in federal law. There's nothing to keep them from doing it.

Carper's "let states choose to set up their own public option or co-ops" proposal is, at best, the status quo. Since Carper's idea would put strong restrictions on the new state-based public option it is, in fact, worse than doing nothing. This idea is not a “compromise”--it is a step backwards.

Baucus Makes Some Improvements to Bill Before Markup

Igor Volsky at the Wonk Room has done a good job explaining many of the more important modifications made to the Baucus bill. To his list I would add three important changes which address a few of my own concerns with the Baucus bill.

Better Ombudsman Office
Baucus decided to significantly strengthen the new ombudsman office by basically adopting the Bingaman amendment I discussed the other day. Originally the costumer would need to fully exhaust all internal appeals before being able to seek help from the ombudsman's office. Now if the appeal last longer than three months they can get professional help from the ombudsman's office. Access to the ombudsman's services still needs to be improved but this is a step in the right directions.

No Multiple Exchanges
The bill would no longer allow states to create multiple exchanges. Originally states could allow “other entities” to operate multiple exchanges in the state. This was a bad provision that would not only dilutes the bargaining power of individual using the exchanges, but could easily become a way for insurance companies to game the system.

National Plans Restricted
Baucus' bill would have allowed insurance companies to sell “national plans” which would be exempt from state benefit mandates. This has been a long time goal of the health insurance industry and would have effective gutted most states' insurance regulations. Fortunately, this provision has be changed to allow individual states opt-out of allowing national plans to be sold in their state. States with very good benefit mandates can now at least prevent their state from being flooded with lower quality “national plans.”

The Most Important Amendments You Have Not Heard About

Baucus' bill creates a new ombudsman office that will “act as a consumer advocate.” This is a good idea. The problem is that Baucus makes the new ombudsman's office nearly worthless by dramatically restricting individual ability seek help with their insurance companies. According to Baucus' mark:

Policyholders whose health insurers have rejected claims and who have exhausted internal appeals would be able to access the ombudsman office for assistance.”

This is a huge problem just begging to be abused. You will be forbidden to get help until you have exhausted all internal appeals. This will create a strong finance incentive for insurance companies to make the appeal process a long painful bureaucratic nightmare. The more complex and time consuming the appeal process the better for the insurance company because it would deny the patient access to professional consumer advocate assistance.

In affect this will replace the problems of “recession” and “pre-existing condition” with the new problem of “death delay.” The hope is that the patient (who would normally be very sick or dealing with a severe medical issue) will either give up in frustration or die before the many complicate internal appeals are exhausted.

Fortunately, Senator Bingaman and Senator Menedez have offer different amendments to help improve the problem by allowing individual to seek help from the ombudsman's office before exhausting internal appeals.

Menedez C#7 is the better of the two amendments and is described as:

Allow policyholders to access the ombudsman for assistance in pursuing internal appeals with their health plans.

Bingaman C#5 is weaker but would be a much needed improvement. It is described as:

This amendment would authorize a policy holder to access ombudsman services: (1) if their internal appeal lasts more than three months or (2) if their appeal involves a life threatening issue.

All the consumer protections in the world are worthless unless there is a strong regulator and consumer advocate to enforce them. As it is currently written the ombudsman's office is a massive gift to the for-profit insurance companies and would encourage bad behavior.

Of course, If Baucus' bill gave people the option of buying a non-profit insurance plan overseen by the government (a public option), they would not need to worry about protecting themselves from a for-profit insurance industry which makes money by denying people's claims.

Washington Post Publishes Lies About Health Care Reform

The Washington Post has recently taken to publishing straight up lies. The article states:

Obama would like, but doesn't need, Republican votes to achieve his goal. But seven conservative Democratic senators -- led by Max Baucus (Mont.) and including Blanche Lincoln (Ark.), Kent Conrad (N.D.), Jeff Bingaman (N.M.), Ben Nelson (Neb.), Mary Landrieu (La.) and Arlen Specter (Pa.) -- oppose the public option as well. So by shilling for the insurance industry, they've made it thus far impossible for Obama to take advantage of the Democrats' majority in the Senate.

This statement is simply false. It is true that Mary Landrieu and Ben Nelson have said they are likely to oppose a public option (although Nelson is technically open to the idea). Reporting also indicates that Kent Conrad does not like the idea. But Max Baucus, Jeff Bingaman, and Arlen Specter have all publicly and repeatedly stated that they support a public option.

Max Baucus's original health care reform proposal that he wrote earlier this year included a robust public option. Even a few weeks ago he told Montanan Democrats that he supported a public option.

Jeff Bingaman has repeatedly said that he supports a public option. He even voted for Senate HELP committee bill which includes a public option.

Arlen Specter has been promoting his support for a public option every chance he can get now that he faces a Democratic primary challenger.

Baucus, Bingaman, and Specter have not drawn a line in the sand on the issue of the public option. All three would not vote against health care reform simply because it doesn't include public option. They would all being willing to negotiate on the issue of a public option in exchange for the broad support needed to pass health care reform through regular order.

Being willing to vote for reform without a public option is completely different than opposing a public option. Either the three senators told the Washington Post that they have been repeatedly lying to their constituents, or the Washington Post should print a retraction.