Time moves quickly inside the Beltway. It was just last week that Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, told a press briefing that Congressional leaders “will get to this a little later,” referencing the creation of any new government-run insurance program.
Apparently “a little later” was yesterday when Senator Charles E. Schumer of New York, the third-ranking member of the Senate Democratic leadership, proposed that any new government-run insurance program comply with all the rules and standards that apply to private insurance.
The New York Times said that the proposal was made in a bid to address fears that a public program would drive private insurers from the market. It added that this was an attempt by Democrats in Congress to shift the debate from the question of whether to create a public health insurance plan to the question of how it would work.
The Times reported that the chairman of the Senate Finance Committee, Baucus, had asked Schumer to seek a solution to the public plan issue that would be acceptable to the Obama administration as well as Republican leaders and the insurance industry. In his response, Mr. Schumer set forth these principles:
- The public plan must be self-sustaining. It should pay claims with money raised from premiums and co-payments. It should not receive tax revenue or appropriations from the government.
- The public plan should pay doctors and hospitals more than what Medicare pays. Medicare rates, set by law and regulation, are often lower than what private insurers pay.
- The government should not compel doctors and hospitals to participate in a public plan just because they participate in Medicare.
- To prevent the government from serving as both “player and umpire,” the officials who manage a public plan should be different from those who regulate the insurance market.
In addition, the Times reported that Schumer said the public plan should be required to establish a reserve fund, just as private insurers must maintain reserves for the payment of anticipated claims. And he said the public plan should be required to provide the same minimum benefits as private insurers.
This sounds to this blogger as if the Democratic leadership has made the first step to find a compromise solution on one major issue now separating the two sides in this debate. Still, as the Times article points out, some thorny questions remain. Could states tax the premiums of a public plan, as they tax private insurance premiums? Would the public plan have to comply with state laws, as private insurers do? Would the government ever allow the public plan to become insolvent?
Alas, the biggest question may be whether the insurance industry will ever accept a public plan of any kind. The Times reported that Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, responded to the Schumer plan by saying, “We are very, very grateful that members of Congress have been thoughtfully looking at our concerns.” But she said she still saw no need for a public plan “if you have much more aggressive regulation of insurance,” which the industry has agreed to support.
This chess match will continue for a while, but keep in mind the Democrats are in the position to end the game their way this fall through the budget resolution passed last week allowing them to consider healthcare reform legislation without the threat of a filibuster.