It’s Baaack! Return of the “Public Option”

After a painful and ultimately losing struggle against bipartisan opposition in Congress, it’s surprising to see that advocates of the so-called “public option” have brought that zombie back from the dead. 

Just as Congress prepares to recess for August, Representative Lynn Woolsey and 128 co-sponsors have brought back a somewhat slimmed down version. H.R. 5808 would establish a Medicare-like public option in ObamaCare’s exchanges. That is, people acquiring health insurance through the exchanges would be able to choose a government-owned plan alongside the ones offered by private insurers. The Left, which wants a single-payer, government monopoly, health plan, sees the public option as a necessary step. By crowding private insurers out of the exchanges, the public option would make more people dependent on the government and paves the way for “Medicare for all.”

According to the Congressional Budget Office’s score, the bill would increase taxes by $27 billion over six years (2014 through 2019), and reduce net subsidies by $26 billion (via a combination of $37 billion less subsidies for people in the exchanges and $11 billion more tax credits to small businesses.) The tax hikes come because even more businesses will be motivated to drop coverage, and dump employees into the exchanges. CBO figures the public option would capture 13 million people. (Although, as John Goodman has concluded, the CBO has already completely missed ObamaCare’s incentives for entire industries to restructure themselves in order to socialize their health benefits, by dumping any workers with incomes under $80,000 into the exchanges).

Because the public option would pay providers lower reimbursements than private plans, premiums and subsidies are forecast to be less than under ObamaCare 1.0. This brings us to the most interesting part of this bill: How it pays doctors. The public option includes a permanent “doc fix” (sort of).  The “doc fix” is the bipartisan farce that takes place two or three times a year to raise Medicare’s reimbursements to physicians in an ultimately futile attempt to motivate them to continue seeing Medicare patients. It achieves this by overturning the Sustainable Growth Rate (SGR) a decade-old law that was supposed to constrain Medicare’s costs, for a few months at a time. (If allowed to go into effect, the SGR would immediately reduce reimbursements by about one-fifth.)

Instead, the public option promises to pay doctors 5 percent more than the “post-fix” rate for three years (2014-2016), after which the fee-schedule will be exempted from the SGR and go up by at least one percent a year, every year. Perhaps this will ensure that physicians will not shun the public option, like they are increasingly shunning Medicare. I’m not a politician, but I can’t believe that these Congressmen actually want to go into the mid-term elections carrying a bill that basically admits that seniors are suffering increasingly limited access to physicians, while creating a new entitlement for a constituency that doesn’t yet exist.

Is there anything good about this bill? Yes! At a mere 17 pages, it is a welcome relief from the doorstoppers they’ve been hitting us with for the last year and a half.

Print