$100 Billion For Second Chances

Republican Senator Olympia Snowe really thinks the health insurance industry deserves another chance to behave. This is why Snowe supports the trigger. Just how strongly does Snowe feel about giving the insurance companies another chance? She thinks it is so important that she wants to waste $100 billion of your tax payer money on this second chance for large, for-profit health insurance corporations.

The CBO says a strong public option would save around $110 billion. Snowe has repeatedly stated that she is completely against this serious cost saver. Snowe admits the CBO has scored her trigger as only saving between $10-$15 billion. (That is assuming that the trigger is not neutered some time in the next five years, which is the most likely outcome.) Snowe is demanding we waste $100 billion of your tax dollars by giving the private health insurance companies another chance to get their act together.

To gain her support, Snowe is insisting that the country waste $100 billion for the explicit purpose of protecting the private health insurance industry from public competition. That money could be used to reduce the deficit, make health insurance more affordable for millions of Americans, and/or reduce taxes. Snowe thinks protecting the health insurance companies is more important than providing people with more affordable health insurance or reducing the national debt.

Keep in mind that the senator demanding the nation waste $100 billion only for the purpose of protecting the nearly worthless private health insurance industry is considered to be one of the most “reasonable” and “moderate” Republicans in Washington. Dropping the $100 billion randomly from a few thousand hot air balloons is a more reasonable and moderate use of the money. With my proposal, at least a few regular Americans who could really use some help might get some of the money, instead of every single dollar of it being funneled directly to the health insurance corporations.

Obama Fighting For To Kill Public Option With Snowe's Trigger

Talking Points Memo is reporting that Obama is now actively working to kill the public option.

Multiple sources tell TPMDC that Senate Majority Leader Harry Reid is very close to rounding up 60 members in support of a public option with an opt out clause, and are continuing to push skeptical members. But they also say that the White House is pushing back against the idea, in a bid to retain the support of Sen. Olympia Snowe (R-ME).

Given the reports that Reid is within a vote or two of being able to pass a bill that includes a national public option with an opt-out, a full-court press by both Reid and Obama should be sufficient to insure health care reform contains a public option. Democrats clearly seem to have the power to get a public option with an opt-out provision passed through the Senate using regular order (or, of course, using reconciliation).

Reid and Obama both claim they want a real public option. Now they have a chance to deliver.

The grassroots, House members, senators, and policy experts have all called Snowe's trigger idea worthless. A public option has strong majority support, and is favored overwhelming among self-identified Democrats. If Reid and Obama reject this chance to deliver on both of their promises to provide Americans with a the choice of a public option, it will stand as a monumental betrayal.

If the public option is sacrificed, just to possibly win the support of one unnecessary Republican vote, Harry Reid might as well resign and officially declare Olympia Snowe Senate Majority Leader. In the next few days, if there is a “trigger,” we will know Reid's continued "leadership" is less than worthless to progressives.

Brown: If There Is A Trigger The Insurance Companies Win

Sen. Sherrod Brown (D-OH) was 100% correct today when he said:

"More than 50 members of the Senate are supportive of a straightforward public option, even with the opt-out," he said on ABC News's "Top Line" webcast. "The trigger is a way for the insurance companies to win."

I completely agree. A trigger will never be pulled. An army of highly paid lobbyists will make sure of that.

Now the question is: Will Brown let the insurance companies win? He has been a strong advocate for a real public option. It is time to put up or shut up. He should publicly state that he will not vote for an industry win, and that he will vote against a bill without a real public option (which means no co-ops and no triggers).

Blanche Lincoln Is Trigger Happy

Blanche Lincoln (D-AR) opposes the public option and voted against both public option amendments in the Senate Finance Committee. And now, she has told the local Arkansas News that she is open to Olympia Snowe's worthless trigger idea:

“If within those first three or four years all of the things that we’re doing are not motivating the private insurance sector to provide meaningful coverage at an affordable price, if that’s not doing the trick, then maybe there needs to be some type of a trigger in that marketplace to say, ‘We’ve got to get people insured.’” Lincoln said. “With a big enough pool, there’s no reason why we shouldn’t be able to get private insurers to do it, but if that is not the case after three or four years, then maybe — it just depends on what it’s coupled with.”

Most of the health care reform provisions do not really start until 2013, so it sounds like she actually wants a delayed trigger that could maybe get pulled around 2017. Not really "the fierce urgency of now" that Obama campaigned on. It is more like the feckless urgency of some time next decade--if things are really really bad. Of course, Lincoln is only open to the idea--she is not yet prepared to say she supports the trigger.

It is good to see Lincoln believes it is more important to give large, for-profit health insurance corporations another chance to play nice, than it is to provide the people of Arkansas a public option that would save them around $1,300 a year on premiums. After all, think what would happen to those poor millionaire CEO's if they had to face competition form a public option.

Mike Ross Being Super Unhelpful, Again

The Hill is reporting that Mike Ross is “suggesting” opening Medicare to all:

Ross (D-Ark.), who had emerged as a leader among centrist Blue Dog Democrats opposing the public health insurance option, has suggested something his colleagues consider even more drastic – opening Medicare to those under 65 without insurance.

Sounds like a dramatic about face for a man who fought diligently to make the public option less like Medicare. Ross bragged about killing the possibility of single payer, Medicare for all. He once pushed hard for the trigger. He worked secretly with Sen. Kent Conrad to try to replace the public option with worthless co-ops. Opening Medicare for all would be a dramatic flip-flop for Ross, but it is not. You see, the problem is Mike Ross does not even support his own suggestion.

"Let me be clear," Ross said in his statement, "I do not endorse this idea, as it was just one of many ideas we, as legislators, have brought up and discussed in the numerous, ongoing negotiations and discussions we have had on healthcare reform over the past several months."

Way to be super unhelpful Mike. The final bill should be on the House floor within a week or two, now is not the time to brainstorm ideas that you're not even sure you can support. Suggesting alternatives that can't even secure your own vote is a waste of everyone's time.

The Hill may have given some coverage to your transparent attempt to sound progressive, but the grassroots community won't fall for your posturing. If you want to be in the good graces of the Democratic bases, do what they overwhelmingly want. Don't stand with the insurance companies, vote for the real health care reform with a public option, like 74% of Democrats in your district want.

The Public Option Trigger: Naïveté, Insanity, or Trickery?

Olympia Snowe and Rahm Emanuel are both pushing hard for their “trigger” idea recently. The idea is the public option would only go into effect if the health insurance industry kept raising people's rates at a rapid pace. (I believe, after studying the trigger created by Snowe, that it was designed to never be pulled. I also agree with Robert Reich that the whole concept of “triggers” just doesn't work in a town filled with highly paid lobbyists, but let's leave that issue aside for now.)

The whole concept of a “trigger” is at least perpetrated on the idea that the for-profit health insurance companies can stop themselves from raising Americans' premiums. It rests on the belief that the insurance industry will promise to stop ripping people off, and they deserve another chance to prove that they can.

The recent “study” released by AHIP makes even the concept of a trigger patently absurd. In their study, AHIP not only promised to keep increasing people's premiums, but promised to do it at an even faster pace. They asserted that they were powerless to do anything to stop the increase. AHIP is telling Congress that they will not stop, they can not stop.

AHIP's own study makes a trigger predicated on insurance industry moderation look insane. There is no mystery now about what will happen in the future. The health insurance industry itself admitted that they will fail to bring down premiums if the Baucus bill is enacted.

At best, all a trigger will do is force Americans to endure several more years of skyrocketing insurance premiums. At worst (and most likely), it will give the lobbyists for the for-profit insurance companies several years to work on crippling or removing the trigger, so that there will never be a public option.

Supporting a “trigger” on the hope that insurance companies would promise to shape up sounds like naiveté. Supporting a “trigger” after the insurance companies promised to increase pre

Good Day For Baucus, Bad Day For Real Reform

I'm sure Chairman Baucus, Senate Majority Leader Reid, and President Obama are all pleased that Republican senator Olympia Snowe voted for the Baucus bill in committee. Their goals have long been to pass anything they could slap the label “health care reform” on and declare victory. Sadly, Snowe's support could signal a bad day for real reform.

Snowe has long been opposed to some of the most important elements of reform. I'm not just referring to her opposition to a real public option and her support for a worthless trigger proposal.

Snowe opposes a real employer mandate, and instead favors a disastrously stupid “free rider” provision. It could have serious consequences for low-income workers.

She is against giving the exchanges the power to negotiate with private insurance companies. This is a provision that should help keep down the cost of health care. It would save individuals money and the government money. Snowe fears it is too much government involvement. John Kingsdale, who runs Massachusetts's exchange, called Snowe's insistence that the exchanges not have the power to negotiate price with insurance companies a recipe for disaster.

Just today, during the committee hearing, she reaffirmed her support for “national plans.” This would allow health insurance companies to sell national plans in any states. Individuals state would lose the power to regulate these insurance plans sold in their states. The national plans would be exempt from all minimum benefit requirements mandated by the state legislature. This has been for a long time one of the top goals of the for-profit health insurance industry.

These are only the few changes that I know Snowe requested. Other good ideas, like a minimum medical loss ratio for insurance sold on the exchange, a stronger regulator, and a better defined minimum benefits package, could also have been excluded at the request of Snowe. For Example, Cantwell's “basic health plan” amendment did not get Snowe's vote in committee. It may be left out of the merged bill because Snowe opposes it.

I fear all of these terrible ideas from Sen. Snowe will make their way into the final bill. Obama has signaled his desperation to win the support of Snowe, and seems willing to accept any idea she has regardless how bad. Snowe's vote may make it easier for the Democratic leadership to declare a political victory, but the cost of winning Snowe's support could be that health care reform is a policy failure. In which case, it is the American people who are the real losers.

So Fades The Co-ops

The CBO's brutal analysis of Conrad's proposal for small, state-based co-ops may have been the final fatal blow for the idea. The Hill reports that prospects for the co-ops are fading fast; it is an idea with few defenders and many detractors:

“It doesn’t have much of a constituency beyond Conrad because it doesn’t please any critics of public plan on the right and doesn’t satisfy any of the ardent public plan advocates on the left,” said a Senate aide. “You don’t gain anything by putting it in the bill.”

Just because the co-ops idea is on its deathbed, it does not mean the prospect for a real public option has increase. Snowe's worthless trigger--that is designed to never be pulled--is seen by many in the Senate as a way to make the claim that they included a public option.

The aide said that most Democratic lawmakers would vote for a public option with a trigger before embracing co-ops. Sen. Olympia Snowe (R-Maine) supports the trigger plan, which would set up a government insurance program only if private insurance companies failed to meet certain standards.

The good news is that progressive grassroots pressure has made it almost impossible for Democrats to pass health care reform without a “public option.” That bad news is that Democrats in the Senate are looking for anything, regardless of how worthless, on which they can slap the label “public option":

At this point, Senate Democrats are signaling they could get behind just about anything they could plausibly call the public option — from a “trigger” that could kick in a public insurance plan later, to Delaware Sen. Tom Carper’s proposal to give states an option to create a government program.

The battle is now over the shape and viability of the public option. Will it be a real public option or a worthless fig leaf with a pretty label?

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.

Clinton Talks Positively About Snowe's Trigger

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Today on Meet the Press, former President Bill Clinton talked positively about Sen. Snowe's trigger proposal. Bill Clinton seems to be mirroring Senator Majority Leader Harry Reid who also had some very positive words for Snowe's worthless trigger idea. We should be expecting the full court press from both the White House and their allies on the issue of the trigger. It seems the only goal in health care is to do whatever Snowe wants and pretend like it is a great idea.

Former President Clinton's comments make it clear that the Democratic Party has a new leader and that leader is Republican Senator Olympia Snowe.

Bill Clinton-

Now, the one Republican who's come up with a good idea is Senator Snowe. She deserves a lot of credit for saying when we did this Medicare prescription drug bill, instead of giving the government the power to negotiate for lower prices we gave the drug companies a chance to offer them, but we held the power in reserve. And if there was any state in America where there was no competition, you could do it. So let's do that for health care. That's a good idea. That's, that's the kind of debate the country needs, and I hope that the Republicans will come forward with it. These...

A Trigger Is An Affront To The American People

With Senate Majority Leader now saying he thinks a trigger is “pretty doggone good idea” it is important to know what supporting a trigger says to the American people. To support the trigger idea you first need to already accept most of the arguments for a public option. You must believe that it could bring down cost, provide competition, and/or be less likely to use unethical practices. If one simply doesn't think a public option would be able to work they should oppose it in any configuration including as a possible trigger.

To support the trigger idea you must also believe that even after the new regulated marketplace is put in place there is still a distinct possibility that insurance companies will continue to rapidly increase premium and treat costumer badly. You must believe that it is possible that our new health insurance marketplace could turnout to have many problems, because of the lack of a public option.

When a politician says they support the trigger idea they are telling their constituents, I know insurance companies treat their clients bad and charge way too much for their products. I know there is a way the government could create a public option that would help millions of Americans with these problems, but helping people is not my top priority. I think it is much more important to give large for-profit corporations another chance to screw over the American people.

Of course, most politicians who claim to support the trigger idea are really opposed to the whole idea of a public option. They support a public option because they are cowards unwilling to be honest with the American people and say they are against the public option. Their goal is a trigger that will never be used, so they can trick their constituents into believing they stand with the vast majority of the country, which supports a public option.

Supporting the trigger idea is an affront to the American people. It is infinitely worse than opposing the public option. If a member of Congress honestly opposes the public option for philosophical reasons or because they think that it would be an unworkable policy, they should make their argument and let their constituents decide. The voters will eventually judge them for their stance.

Supporting a trigger is telling your constituents that there is this great idea which could help millions of Americans get more affordable health care, but I think it is more important to give the large for-profit health insurance corporations another chance to pay nice before providing regular people with relief. To support a trigger is to stand proudly with the health insurance industry against the middle class Americans.

Harry Reid Falls In Love With A Horse Named Trigger

According to the Las Vegas Sun, Senate Majority Leader Harry Reid said that he thought Snowe's trigger proposal was, a “pretty doggone good idea.”

I think the whole idea of a trigger is inherently flawed. Former Labor Secretary Robert Reich did a good job explaining that Washington is full of lobbyist whos job it is to make sure things like triggers never get pulled. Snowe's trigger specifically is worthless trigger that is designed never to be pulled. Even if pulled the single state based public options it would create are likely to lack the size or power to have an effect.

Reid do have some rather unkind words for the idea of co-ops which he thinks is worse than Snowe's trigger proposal. Reid said about co-ops,

It would be better than nothing but it’s nothing I’m going to jump for joy with.

I think that all signs point to the fact that the idea of co-ops are starting to lose favor (A very critical report from the CBO might have something to do with that). Even the father of the co-ops idea, Sen. Kent Conrad, is now admitting that they are as currently written too restricted and would not have the full ability to compete with private insurance.

Orszag Promotes Co-ops And Trigger, Ignores CBO Report

In an interview with Bloomberg.com, White House Budget Director Peter Orszag talked about his support for Co-ops and Triggers.

Orszag signaled the administration doesn’t consider a government-run insurance program essential to the legislation. He suggested it would be sufficient to either create nonprofit insurance-purchasing cooperatives or set “triggers” to activate a public option if needed to cut costs...“The goal here is just to introduce more competition where competition is inadequate,” Orszag said. “Either one could work.”

Orszag's statement directly contradicts a CBO report that says,

[The co-ops] seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments.

I guess former CBO director Peter Orszag now also backs the new Conrad CBO Standard. He must share the belief that whatever the CBO determines is incredibly important unless they disagree with Senator Kent Conrad.

Snowe Offers Worthless Trigger Amendment

Senator Snowe has offered a public option trigger amendment to Baucus' health care reform bill. The Amendment's description states:

This amendment establishes a non-profit government corporation through which a “safety net” plan would be provided in any state in which affordable coverage was not available in the Exchange to at least 95% of state residents. An individual would be deemed to have affordable access if either of two conditions is met. First, two or more plans are offered with premiums – the cost of which does not exceed a specified percentage of the individual‘s adjusted gross income (AGI), after deducting any available tax credit or employer subsidy from the cost of such premium. The percentage contribution shall range from 3 percent of AGI at 133 percent of the Federal Poverty Level, to 13 percent at 300 percent and above.

Assessment of affordability shall follow submission of plan premiums filed one year in advance of the first day of each policy year, and should a state be found to not meet the 95% threshold, plans would be permitted to submit of any revised premium filings, after which a second assessment of affordability shall be performed. If, after that second assessment, a state still be deemed as not meeting the affordability standard, the safety net plan shall be offered within that state, and shall be available at the pending open season enrollment.

This “safety net” trigger is worthless. Baucus' bill already mandates the government provide sufficient tax credits to make sure the outlined trigger conditions would never be met. Basically the only way the “safety net” plan will ever be trigger is if the federal government violates its own laws. If the government is violating its own laws about providing sufficient tax credits, why should we believe that it will ever follow the law by then creating this “safety net” plan? This is not public policy, this is pure theater.

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.

Conrad's Co-ops Are No Compromise Because They Are Designed To Fail

The problem with Conrad/Ross' state based co-ops idea is not just that co-ops have proven to be a mostly unsuccessful model for health insurance. The real problem is that they are purposely designed to fail. Conrad wants there to be 51 co-ops (50 states plus DC), and he would restrict the co-ops to only offering plans to the individuals and small businesses using the new health care exchange (roughly 10% of the population). According to Conrad's own admission a health insurance co-op needs a minimum of 500,000 members to be able to negotiate competitive rates.

Using Conrad's own 500,000 member threshold, even if every single person using the new exchange joined a new state based co-op, over half the states in the country would not have a sufficient population to create a competitive co-op. Using a more reasonable assumption that as many as one fourth of individuals on the new exchange would choose to join a new state based co-op, only four states (CA, TX, NY, FL) might have enough people sign up for their state's co-op to barely reach the important 500,000 membership mark.

The restrictions placed on the new health insurance co-ops would make it financially impossible to create 51 new co-ops. With the restrictions, it seems that creating even 15 viable co-ops nationwide would probably be impossible. From what information I have, I suspect that between 4-8 is the maximum number of viable competitive co-ops that could be created nationwide. That would only be possible with a massive capital investment, focus on creating national not state based co-ops, and serious start up help from the government.

If the legislative restrictions were not bad enough to kill the co-ops, the absurd way they are set up should. According to Baucus' framework,

Grants and loans will be awarded by the Secretary of HHS based on recommendations made by an advisory board. The advisory board will be chaired by the Secretary (or a delegate) with other members appointed by the Majority Leader of the Senate (4 members), the Minority Leader of the Senate (3 members), the Speaker of the House of Representatives (4 members) and the Minority Leader of the House of Representatives (3 members).

This means that Senator Mitch McConnell and Congressman John Boehner would likely appoint half the board who decides which groups receive help establishing co-ops. Both have been highly skeptical of the whole idea of co-ops and health care reform. They have a strong political reason to make sure the co-ops fail. Giving them this power is like hiring a butcher to start a vegan restaurant.

I've previously explained how the trigger idea can very easily be made worthless with only a minor change. Robert Reich has done a great job explaining how Washington is filled with highly paid lobbyists whose job is to make sure things like a trigger are never pulled.

Neither Conrad's co-ops or Snowe's trigger are a compromise on the issue of a public option. They are fig leaves designed to fail. Their only purpose is to be a face saving measure to pretend that Obama did not break another campaign promise. A real “compromise” would be something (or group of things) that could fulfill the many goals of a public option in another manner. Small state based co-ops and triggers are not compromises, they are surrender.


Note: None of the Gang of Six represent a state large enough to support a state based co-op. In fact even if there was only one co-op for all six states it would still lack sufficient membership to be able to be competitive.

Why The Trigger Is So Dangerous

It appears that Obama is trying to convince Republican senator Olympia Snowe to support health care reform by offering to support a trigger for a public option instead of a public option available from day one. The trigger option is incredibly dangerous and should make progressives very nervous. It is theoretically possible to get a “good” trigger that might help control cost, but even the smallest modifications could make it worse than useless. A bad trigger could actually do more harm than having nothing at all.

I have previously explained the many variables involved in a public option and will explain how a very small change could make a trigger useless.

What
A good (or one that might at least do something positive) trigger would need to trigger a public option based directly on Medicare. It would need to be either a Medicare buy in public option or Medicare rates plus public option. (a public option which pays providers Medicare rates plus some percentage.) Anything short of that would not work. A Medicare buy in public option would also save a lot of money and could be scored by the CBO. The CBO should be able to score a robust public option that could be triggered as saving money.

How to ruin it - Allowing Medicare providers to opt out or creating a “level playing field” plan cannot work with a trigger. Less robust public options could work only because they would be large national plans able to use their market share to keep rates low. Since the trigger might create a public option only in states where the private insurance companies failed it must piggyback on Medicare to be effective.

When
The trigger would not be able to be pulled very soon. It would not be able to be triggered, at most, until 2-3 years after the reform system goes into effect.

How to ruin it – If the time line for the trigger is too long it could result in higher, not lower, premiums. If the public option could only be triggered, say, eight years after reform started, it would create a strong incentive to dramatically raise premiums in the years leading up to the possible trigger date. Dramatically raising premiums before the trigger could be pulled would give the insurance industry large profit margins/cash reserves/waste/fat to whittle down for years while they keep premiums just below the level that could trigger the public option

Why
The public option must be a growth in premiums trigger. My preferred trigger mechanism would be if average insurance premiums for any insurance grade, in any area, for any year, grow at a rate faster than rate of growth in Medicare or 140% faster than the rate of increase in the consumer price index.

How to ruin it – Setting the growth in premium rates too high would make the trigger worthless. Making the trigger a lack of competition trigger would make it counterproductive. By triggering a public option if an area had too few companies, it would create strong incentive for insurers to not reduce premiums in an attempt to drive less efficient companies out of business.

Where
The insurance market should be monitored nationwide, state wide, region wide, or city wide to see if premiums grow too fast in any area that has more than 100,000 people. If premiums grow too fast in any area the public option must be triggered for that market.

How to ruin it – By making the size of the areas being monitored too large it could result in millions of Americans being ruined with out of control premiums. If the public option was only triggered if premiums grow too fast on a state wide average, people in Los Angeles could still face no relief from out of control cost if premiums in northern California were being held steady.

How
The trigger must be automatic. If conditions are met the robust public option must be available right away.

How to ruin it – One of the easiest ways to make trigger useless is by requiring an up or down congressional vote or a vote by the effected state legislature if the trigger is pulled before starting the public option. This congressional pre-approval provision would ensure the public option would never go into effect. It would also create a strong incentive to increase premiums dramatically while Republicans control one chamber in Congress.


Is it possible to create a useful trigger? Technically, yes. It would need to be a two year automatic trigger for a Medicare buy in public option if premiums grow faster than Medicare in any area for any one year.

What is so dangerous is that it is incredibly easy to make the trigger worthless or even harmful. Changing a few words in the legislation could strip the trigger of all its power. Understanding the difference between a good trigger and a terrible trigger is not easy. Don't expect the mainstream media ever acknowledge or even notice the difference.

The trigger would become the target of a quiet multi-million dollar all out lobbying assault and could be ruined at the last minute behind closed door with almost zero media coverage. Explaining how the smallest last minute change to the trigger had ruined the whole health care bill would be nearly impossible for progressives.

The trigger is so dangerous because it is so malleable. Progressive would need to guard it like a hawk and there would still be no guarantee that they would not be stabbed in the back at the last minute without media fanfare. If the Congressional progressives embrace a well designed trigger they are setting themselves up for a swift, subtle, and complete betrayal. The trigger could quickly go from a real tool to control cost to a fig leaf, or even a leaf poison ivy.

The Infinite Complexity of A Trigger For The Public Option

The idea is that a public option would only be triggered at some point in the future by some failure in the private health insurance market. The trigger has little broad support but is still readily defended by Republican Olympia Snowe. It now appears that the only way health care reform will be passed under regular order is with almost all the Democrats, the two Republican senators from Maine, and at most one or two other Republicans. While I think the likelihood of the trigger option being included is small, the fact that it is supported by Olympia Snowe and Rahm Emanuel means it deserves closer scrutiny.

One of the biggest problems with the trigger idea is that there is no one trigger proposal. If there are dozens of ways to construct a public option, there are thousands of different ways to construct the trigger. Finding a single trigger option that can get broad support seems an impossibility.

The trigger is a simple sounding idea that in fact is an issue with an infinite level of complexity. The trigger has five main variables: the what, when, why, where, and how. Each variable has dozens of possibilities.

What – What public option will be triggered?

I wrote earlier about how there is no one public option but in fact a whole spectrum of different public options. They run the gambit from a robust Medicare buy in to a very weak semi-independent non-profit company. Determining which type of public option would be triggered is only step one.

When – When could the trigger first be pulled?

The idea of the trigger is to give the private insurance market some period of time to fix itself in a new, more regulated marketplace before introducing new competition in the form of a public option. What would need to be determined is how long before the public option could be triggered. Would the private insurance companies get -- one year, two years, five years, ten years before they needed to worry about the trigger? When the trigger could first be pulled is an important variable.

Why – Why would the public option would be triggered?

I believe this is the most important variable. There are two main reasons why a public option could be triggered. One is the lack of competition trigger, and the other is the growth of premiums trigger.

The lack of competition proposal is the idea that the public option would be triggered only if a certain area lacked a sufficient number of competitors. This can take the form of a simple number of competitors (example: if an area has three or fewer competitors the trigger is pulled) or are market share issue (example: if any one or two companies control more than 80% of the market the trigger is pulled). The lack of competition trigger is a bad idea. The important issue is the exploding cost. A lack of competition trigger could end up make the problem worse by encouraging collusion. It creates a perverse incentive to not cut rates and try to drive out inefficient insurers.

The growth of premium trigger is a much better idea. It is triggered if over some period of time premiums increase too quickly. It can be a flat percentage increase, tied to the growth rate of Medicare, or tied to consumer price index. This trigger could in theory at least put some downward pressure on premiums.

Where – Where would the public option be available?

The where question is two parts. First, what the size of an area examined to determine if the trigger conditions are met? Is it a city, county, region, or state? The other issue is when the conditions are met, where will the public option be available once triggered. (For example if the conditions are met in Albany would the public option be only available in Albany, the surrounding counties, all up state NY, or statewide?)

How – How is the trigger pulled?

I've heard of two possible ways about how the trigger would be pulled. One is the automatic trigger. If conditions are met the public option becomes immediately available in that area. The other idea I've heard suggested is the congressional pre-approval trigger. If conditions are met that triggers an immediate up or down vote in Congress to decide to implement a public option.

A trigger in theory could be constructed to have a positive effect at controlling the exploding cost in health care. It would need to be a growth in premiums trigger, for a Medicare buy in public option, which would be automatically pulled nearly immediately. It is easy to also design a trigger that would be worthless or even counter-productive.


The trigger idea may to some seem like a useful political compromise. There might even be an incredibly strong trigger plan which progressive might reluctantly accept, but the people in Congress who oppose a public option will likely equally oppose a strong trigger. There are thousands of ways to design a trigger plan, and finding a single consensus would seem an impossible goal. Pursuing the trigger idea will only lead to new riffs and infighting.

Note: If politicians have trouble explaining the public option, explaining the trigger will be a near impossibility. An option which is likely to make all sides equally angry.