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Jason Rosenbaum

Jason Rosenbaum

Posted: September 4, 2009 06:26 PM

A Trigger for the Public Option -- a Plan to Kill the Public Option


Those that want a trigger for the public health insurance option are saying, "Let's give the insurance industry one more chance to clean up its act." We've been there and done that, fifteen years ago.

That was the same argument the insurance industry made in 1994 and we've seen what happened since. Premiums are rising four times faster than wages. People are going bankrupt at the rate of one every 30 seconds due to health care costs. 95% of the insurance markets around the country are anti-competitive. And 14,000 losing their coverage every day.

They didn't clean up their act last time, and they won't this time. And this time, an individual mandate will require us to purchase insurance from these very same companies while we're waiting for the trigger to be triggered, if indeed it ever is.

When the idea of a "trigger" for the public health insurance option was floated a few months ago, I and others explained why the proposal was not a public health insurance option and not health care reform. In fact, a trigger would be nothing but a win for the insurance industry because it serves to kill the public health insurance option outright. The case is the same now that it's being floated again.

Why? There are a multiple reasons.

1. By any rational measure, triggers have already been triggered

Finally, given the depth of our health care crisis, with bankruptcies every 30 seconds due to health costs, 95% of the insurance markets around the country being anti-competitive, and 14,000 losing their coverage every day, haven't requirements to trigger a public health insurance option already been met?

Chuck Schumer put it best when he said (emphasis added):

"Some who have been skeptical of a public plan have been calling for a "trigger," that would introduce a public plan some time down the road if certain conditions were met. Today's report [on the non-competition of insurance markets] blows away the idea that we should wait for a trigger. Today's report seems to suggest that any reasonable criteria for triggering a public plan has already been met.


After all, if we were to write a trigger into comprehensive health care reform, what would it look like? The main criteria would be market share and premium price. This report today shows that in many states, both conditions have already been met. Premiums are high, and either one or two insurers dominate the market. As we've seen with Medicare part D, a trigger option has so far meant no public option at all."


A trigger proposal asks America to wait for the health insurance crisis to get worse before fixing it.

We already have skyrocketing prices. Insurance is already unaffordable. Insurance companies are already gouging us for more and more money while denying us for more and more care.

Trigger conditions around the country have been met. These companies need some honest competition. And the only way to give it to them is a national public health insurance option, available everywhere on day one.

2. Triggers as proposed would make the public health insurance option non-functional

The proposal for the trigger indicates that:

...a new government corporation would offer health insurance in any states where affordable coverage was not readily and widely available from private insurers. The corporation would not be part of the Department of Health and Human Services, although federal officials would serve on its board.


The public insurance plan would be offered in any state where fewer than 95 percent of the residents had access to affordable coverage.


The problem here is similar to the problem with the co-op. Under a trigger, public health insurance plans would be created, but only on a state-specific basis. You've have different plans popping up at different times around the country. In short, the public health insurance option would be fragmented.


For example, in rural areas with few choices for health insurance, the situation is stark. People will be forced to buy unaffordable insurance from the only option (private plans) available in their area, all because their state doesn't meet the requirements for a triggered public health insurance option. It's discriminatory.

And, this fragmentation means the public plans created under this proposal wouldn't have the clout to compete with private insurers. Think about it: Private insurers are national mega-corporations, with huge amounts of cash and predatory business practices. They already collude with each other and with providers to drive out smaller players or force them to play by their rules. How would a state-based public option be able to take them on?

3. Triggers will never be triggered

We've tried triggers before. In fact, we have a trigger in place in the Medicare Part D program. It hasn't done anything to stop big PhRMA from gouging seniors:

[Medicare Part D] didn't help a large minority of the senior population deal with drug costs because of the massive "doughnut hole" problem. There are millions of seniors caught in the so-called doughnut hole, where thousands of dollars in annual prescription drug costs must come directly from their individual pocketbooks, or they will go without the often life-saving medications.


The legislation had a "trigger" built in to supposedly protect consumers and taxpayers against huge cost increases in the program. If the bills became too large, a "public option" would kick in and tell Big Pharma what's what. Unsurprisingly, that threshold has not yet been reached.

As a result, Big Pharma got a big windfall (a whopping $3.7 billion in the first two years alone) from Medicare Part D.


Tim Foley at Change.org continues the argument:
The trigger may be set up so, in effect, it never happens, similar to the Medicare Part D trigger that would have created a public prescription drug plan - but never did. The threshold would be low enough that it could be easily, and superficially, met. Throughout those "several years," the insurance plans would receive all of the uninsured who enroll through a National Health Exchange, pocketing what we can hope are generous government subsidies, with very few changes to their behavior.

What the trigger does, in effect, is tell the insurance industry the exact bare minimum it must do to keep the status-quo. The insurance industry will undoubtedly step right up to that line but not cross it to avoid a public health insurance option in that state, and they will undoubtedly lobby to change the trigger minimum so they can keep up with their practice of turning your health into shareholder profits.


Plus, that trigger will be set at a lower level than current conditions, allow the insurers to make even more money at your expense. It's a win for them, but not for you.

The trigger will never be triggered. Instead, the trigger proposal is a plan to kill the public health insurance option outright.

A trigger for the public health insurance option would create underpowered public plans that would be swallowed whole by the insurance industry. A trigger would also tell the insurance industry the exact minimum level of care and service they need to provide (a level worse than they provide now) before they face competition, giving them incentive to stay at that level and no better. That trigger will never be triggered - instead, it will kill the public health insurance option. But most importantly, a trigger wants us to wait for our crisis to worsen before we fix it.

That's not a compromise. That's not even a rational proposal. Waiting for the crisis to get worse does nothing but help the insurance industry at the expense of our wallets, our health, and our lives.

The trigger kills the public health insurance option. It is not health reform. It should be rejected.

(also posted at the NOW! blog)

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