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.

Worse Than Nothing: Carper's “Alternative”

Since I got my hands on the one-page document outlining Carper's weird hybrid “alternative” I've had a chance to study the proposal in greater detail. After carefully examination I've determined that it would literally be worse than nothing.

To my understand there is currently nothing legally preventing the states from implementing any of the three possibilities right now. I've read for example that Maine attempted to create a form of quasi public health insurance plan. Iowa recently experimented with encouraging the creation of new health insurance co-ops. To my knowledge both ideals were failures. State sponsored health insurance purchasing co-ops have been tried in the past and do not reduce premiums.

The Carper amendment wouldn't permit anything which is not currently allowed; so it appears that Carper's amendment would then be worthless. . . but take a closer look, and you will see that it is worse than worthless. Carper's plan would, in fact, restrict what states currently could do.

The amendment says:

This would allow a state to offer a state public option; however, both the executive and state legislature would have to agree.

Most states (I believe every state) allows a law to be passed over the veto of the governor if it can get a super majority in the state legislature. By requiring both the executive and state legislature to agree, the amendment is placing an even higher standard than what is current law in order to create a state public option.

The amendment would place restrictions how the public plan could be run.

Regardless of the mechanism chosen, the state would be bound by the same insurance regulations and benefit requirements as private plans in the exchange. The mechanism would have to be completely self financed, aside from initial seed funding, and would be required to have a reserve fund in the same manner that private plans have. The mechanism could not explicitly require doctors to participate, nor use provider participation in Medicare or other public programs to force participation. Additionally, the state could not use Medicare or Medicaid style price controls or rates - they would have to negotiate rates.

If a state started a public plan today they would not be required to follow all of these restrictions.

Finally, Carper's amendment would strongly limit who could uses this new state public plans or co-ops.

The state mechanism would only be open to individuals who were eligible to acquire coverage through the exchange.

Once again, states can already help create insurance co-ops. They don't need to restrict who can sign up for insurance co-ops. There are currently non-profit health insurance co-ops in this country which are able to sign up everyone, not just people on the individual or small group market.

Carper's Amendment does not increase a state's ability to encourage greater competition, it cripples them. The amendment says it would provide seed money for co-ops. It is unclear if it would also provide any (or sufficient) seed money to start the state-based public plan. Seed money is the only possible advantage in the amendment, but probably couldn't make up for the crippling restrictions.

I would like to congratulate Senator Carper. He managed to come up with an “alternative” to the public option that could literally be worse than nothing at all.

Carper Trigger: Idea Goes From Bad To Worse

Yesterday, I wrote about the terrible idea Sen. Carper has been trying to sell as an “alternative” to the public option. Thanks to a report from Politico it appears that the idea is even worse than I first thought.

Carper’s proposal would leave decisions and solutions up to the states. While Snowe’s amendment sets only an affordability test for the trigger, Carper would allow states to opt-in if affordable insurance is not widely available or the insurance market is dominated by only one or two players.

It sounds like Carper's plan is a trigger, but a trigger that once pulled requires each state legislator to than act. If the state legislator act it must than choose from three basically worthless options, a state based public option, co-ops, or some kind of managed government partnership with private insurance companies.

If this is the case than Carper has the dubious distinction of coming up with the worst “alternative” to the public option so far. A trigger for co-ops. This idea is so bad, it makes Conrad's worthless state based co-ops look robust.

FYI Politico: I understand Carper or one of his aide probably fed you this line of BS.

the Delaware Democrat never staked out a public position on the government insurance option, solidifying his status as the model of an undecided moderate in need of persuading

But it is not true. Back on July 6th Carper said told MSNBC that he was against a national public option that is available on day one. He said he is with Sen. Snowe and thinks there should be a trigger like the trigger in Medicare Part D. Carper has repeatedly said he supports the trigger idea.

Carper's Brand New “Alternative” To The Public Option

Politico is reporting that Sen. Carper has a brand spanking new “alternative” to the public option that he has been secretly shopping around the senate.

Carper suggests giving states the option of creating a competitor to private insurers, which could include a government plan, a network of co-ops, or a large purchasing pool modeled after the revered Federal Employees Health Benefits Plan.

First, a “large purchasing pool modeled after the revered Federal Employees Health Benefits Plan” is what the new exchanges in health care reform are suppose to be. The is not a new idea. This is not an alternative to a public option. This is what the system would be similar to without the public option.

State based public plans are unlikely to have much of an effect on the health insurance market. Because they would likely be restricted to the new exchanges, state based public plans in less populated states would have extremely small risk pools. They would also lack the size need to negotiate the best rates possible. Finally the CBO has already looked into Conrad's idea of co-ops and found them to be basically worthless. Restricting them even farther will not help the matter.

Progressives should take heart though that Carper is floating a new “compromise.” It is a sign that progressive grassroots organizations and members of Congress have successful rejecting previous fake compromise, like trigger and co-ops. Carpers plan is just one more in a long line of worthless fig leafs, trying to masquerade as real reform.

Baucus, Menendez, and Carper Vote to Defend PhRMA Deal

Sen. Bill Nelson proposed an amendment which would fill the Medicare part D dough nut hole. He would pay for the change by making the pharmaceutical industry pay a rebate for the overcharging of dual eligible Medicare/Medicaid seniors. The amendment would fully cover the cost of filling the dough nut hole and provide an additional $50 billion in government savings. The amendment would violate the secret deal reach between PhRMA, The White House, and Chairman Baucus.

Democratic senators Baucus, Menendez, and Carper vote against the amendment. All Republican senators also voted against the amendment.

Democratic senators Nelson, Rockefeller, Conrad, Lincoln, Bingaman, Schumer, Wyden, Kerry, Stabenow, and Cantwell voted in support of the amendment. The amendment failed 10 to 13.