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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Comments

[johnie2xs]

The opponents of reform are not just against points of reform, they are against ANY reform. Even if you can successfully refute their claims on an individual basis, just like the Lays Potato Chips commercials, "they'll make more". If not "Triggers", it's "tort reforms". If not "tort reforms", it's "budget increases". If not "budget increases", it's "killing grandma". You get the point.
All the opponents do is sit in the duck blind and take pot shots. They have nothing positive to add to the discussion, except in fall back suggestions which if anything, bolster the Insurance Industry stance.
The Obama administration has just done an abysmal job rolling the whole thing out. The fact of letting the Congress draw up the legislation without clear points that could have been disseminated all along, may have not been the wisest way to go about it. Especially considering the fact that they set up absolutely no mechanism with which to refute whatever complaints the Rethuglicans may come out with.

The Presidents speech on Wednesday is really breaking out to be a real make it or break it moment. He's severely boxed in. He either gives the Rethugs their victory and alienate his own constituency, or throws the gauntlet down, four square in favor of the public option.

Either way, it's going to be a very bumpy ride.

[Mover]

All the bad things you mentioned and then some (higher costs, huge deficits, & killing grandma) are part of the Congress's health care reform bill, HR 3200. It is the nature of the discussion that all of the bills faults cannot be discussed at the same time. It's too big and has lots of bad stuff in it, including new taxes on the middle class and free health care for non-residents, including illegal aliens.

I am not against reform.

I am against this reform.

And a trigger to add the public option later, since it will not pass with that so called public option in it now, only guarantees and public option in the very near future. The idea that it would never be triggered is patently false. This reform bill mandates higher premiums from private sector insurance companies. There's your trigger.

[msgirlintn]

What shall it profit a President to gain one Republican and lose his own party? This isn't change we can believe in. It was reported that he told the Progressive Caucus yesterday that they should "take one for the team. The Progressives might be in safe districts but there were blue dogs that aren't". The President needs to take his own advice. He may not be in a safe seat in 2012 if he doesn't do what he promised. He can pass it through the senate with 50 votes plus the vice president. There is no such thing as bipartisanship with Repubs right now. Even if they do water it down with this phony trigger option, the Repubs will say he only got 1 vote so that's not true bi-partisanship. Let the Repubs complain and threaten all they want to, cause if it's not the public option they are complaining about, it will be something else. Started out that way in January and in August it is even worse. You can't negotiate with a group of people that only has one word in his vocabulary "NO"

[Mover]

IF Obama excludes the GOP from consideration it means he is the same type of politician he promised you he would not be. That is why he is softening on the public option portion of the health care bill.

I can tell you from my point of view that if it passes, I hope it passes with no GOP votes. Then in 3 years when everyone's income taxes will have to be raised to pay for the extra 2 or 3 trillion dollars each year in medical expenses, conservatives can point their fingers at Obama, Democrats in congress and the people who supported them, and say, "I told you so".

Everyone loves Medicare and Obama wants to make all insurance into Medicare clones. But nobody mentions that 75% of Medicare's Part B expenditures are coming from the general fund. It does not pay for itself and receives the largest government subsidy of all known subsidy programs in the history of this country.

[Lyn91]

Well if this doesn't happen we'll be looking for another candidate who will be more aggressive on this issue who can win the Presidency. It will no longer be ignored like it has been. It seems like this has become an even bigger issue for Democrats. So if Obama doesn't pass it, maybe another President will...soon? I hope.

[SHADETREE]

Look the left needs to face reality this health insurance reform is a bailout for the insurance industry, so get ready thier going to get individual mandates and lower preiums but higher deductables just like auto insurance is now i can't wait to get my 60-40 deductable. change you can believe in

[RepugsOut08]

I agree.
And what the people who defend the insurance companies don't get, because they've obviously never used their insurance for anything major, is that those deductables can leave them with tens of thousands of dollars in instant debt.
If people would really get this, say by being told by a strong leader if we only had one, they'd be in the streets raising holy he.ll!
It will be too late for the reform haters to cry, when their trip to bankruptcy court or the morgue comes.

[jmpurser]

Agreed. David Sirota has a valuable column on the difference between parties and movements. The left needs to recognize that the Democrats are in business to gain power while the Left wants to make people better off. Our agendas do NOT coincide unless the left is willing to dump the Democrats when they betray our principles.

[Emerald1943]

Okay, consider this...Congress passes this "trigger" legislation with the democrats in control of the two Houses. People are so fed up with the lack of action on the health care reform that the Rethug Party comes roaring back in 2010, taking many seats back and gaining the upper hand again.

Just how long do you think they would wait before they repeal this "trigger" and we are right back where we started!

NO TRIGGER....NO DELAY.....PUBLIC OPTION NOW!!!

[johnie2xs]

Obama needs to understand this is not a Frank Capra film,
It's more like Quentin Tarantino.

[mysistagirl]

The right wants to do nothing, and that's not acceptable. The left wants to do everything, and the votes make that not possible. The right will kill health care in the senate if there is a public option, and the left will kill health care in the house if there is no public option. I appreciate the minefield that this President has to navigate, and frankly, the criticism coming from progressives is selfish, unwarranted, and completely lacking of understanding of the dilema that the President faces.

Reform with a triggered public option the lesser of two evils--the other evil being no reform at all.

It's foolish to kill all health care reform for the sake of the public option. THAT is what is meant by "making the perfect the enemy of the good". Health care reform includes the end of the pre-existing condition fiasco, the end of the lifetime benefit amounts, the end of dropping people from insurance when they become too costly, etc. As desirable as a public option is, it should not be the sole basis for denying all the rest of the reforms to go forth. Yes it's more perfect to have the pubic option, but if we don't have the votes to get it, then lets stop the insurance companies from insane practices with the rest of the good reform measures. This is why the President won't draw the line in the sand. He knows that no reform at all is the worst scenario.

[Heartlight3]

I disagree. I think that health care reform without a public option is worse than no health care reform. If we pass a bad bill we are stuck with the bad consequences for a long time. If we don't pass anything, we can try again next year. It is much harder to rescind a bad law than it is to never make the law in the first place. ( If you want an example, take a look at Iraq) If we pass a law that mandates insurance without a public option, the insurance companies make out like bandits and the poor and unemployed are scr*wed again. Most of these comments are obviously from the viewpoint of people who have insurance. "Oh well, something is better than nothing and we can put up with some more inconvenience while we wait until it gets bad enough to force us to do something." But from the viewpoint of people who are uninsured or underinsured, waiting is not a viable option.

[mysistagirl]

You're wrong and here is why. The biggest challenges facing current health care recipients is the following:
1. loosing their jobs and then being denied coverage because of pre existing conditions, resulting in bankrupcies.
2. Aging recipients reach lifetime limits on coverage and are dropped from the rolls resulting bankrupcies.
3. Have catastrophic illness and are dropped from the rolls, resulting in bankrupcies.

These things are devastating consumers and none of them have anything to do with the public option. The regulation needed to stop these insurance company practices are apart from the public option. In other words, the public option is the ICING, not the CAKE. If you think it'swise to destroy the cake because it has no icing, think again.

The public option addresses the cost issue, which is currently too high for a lot of the 47 million uninsured to get it. The public option is a great way to address that issue, but it in no way addresses the major issues facing the already insured or the kicked off the rolls folks.

You say waiting, for those who are uninsured or underinsured is not a viable option, yet, you are willing to make them do just that for a public option. Many of them are un or under insured because they got kicked off the rolls for reasons listed above. Passing nothing(which is exactly what the right wants) will cause all of the above to increase astronomically, and that is not sustainable nor acceptable.

[mysistagirl]

By the way, I agree with you about the mandate. The mandate addresses the uninsured as does the public option, so one should not happen without the other. If there is no public option now, or a triggered public option, then the mandate should not be enacted until the public option kicks in, or else it would be a bonanza for the insurance companies.

[ElTommo]

The Republicans can't filibuster in reconciliation. That's what it's going to come down to, in the end. It's the only way to get it past them and the traitorous Blue Dogs.

[mysistagirl]

Most people clammoring for the reconciliation option to pass health care don't understand the process. The bill can be utterly destroyed in the reconciliation process. It only takes 51 votes to pass it, but that vote is the very last part of the process. It is what takes place before that vote that can do damage.

Only items that directly affect the budget can be considered during reconciliation, so the health reform bill will have to be split into two separate bills. One with the regulatory measures in it, and a second one with the public option, mandate, and tax matters in it.

When the second bill hits the senate floor for reconciliation, republicans can raise motion after motion to remove bits and pieces from the bill. The senate parlimentarian will rule on each motion and the only way to overturn the parlimentarian's ruling is with 60 votes. This means that the bill that enters the process is NOT going to be the same bill that comes out of the process, and it will be considerably weaker and looking like swiss cheese. After all the slicing and dicing of the bill, then there is a majority vote, and the bill will very likely be so weakened, that 51 democrats won't even want to pass it.

Reconciliation is a slippery slope.

[Mover]

Sorry, but the "right", or Republican politicians, are doing something. They have offered amendments and even their own reform legislation. All amendments that were offered were shutdown by Democratic majorities. Dems are exceptionally partisan, you know.

[jmpurser]

Yes, the trigger was designed to kill the public option. Of course the "public option" was designed to kill single payer. Even Obama isn't for real health care reform. His priority is to save the insurance industry.

[RepugsOut08]

This is the sad conclusion I've come to as well. He's got one more chance to get it right this Wednesday.
The sad thing is, he watched his own mother go through this as she was dying. I will never understand it, if he turns out to be the protector of the insurance industry.

[Marlyn]

"government corporation" ???

Isn't this an oxymoron?

[BruceHNV]

Not if you know anything about the VERY common entity known as the government corporation.

[Marlyn]

"Let's give the insurance industry one more chance to clean up its act." ???

We should let the insurance companies regulate themselves AND pass a PUBLIC OPTION.
Then we could let the market place decide.

But NO TRIGGERS. That is just a stall ... they always say, not now, too soon, just a few more ...

[Gudrun]

I agree, we already know the track record of the insurance companies over the decades, Pull the trigger now!

[NightAdder]

Triggers not only buys time for insurers to sabotage a true public option, it also buys time for republicans hoping to change the political landscape so all health care reform will be killed at some point in the future. In other words, a plan with a trigger is not only myopic, it's very naive, mainly because the proposal acts as though health care insurers and republicans will play fair and honest with the rules. These people will stop at nothing to defeat reform, any reform. The town halls show it. Conservative talk radio shows it. The 100% no-change republicans in Congress show it. It's time to stop trying to placate to people who will never support the president on any issue. It's time to go our own way, just as the republicans did during the Bush years.

In order for true reform to really work efficiently, it has to be done equally on a national basis to make those seeking insurance more immune from political horseplay by state legislators. Anything less will just embolden the right wing cause.

[purplexed]

Who's to blame?

The writer here blames insurance companies for people experiencing bankruptcy, to which I reply how? Is an insurance company responsible for changing the laws of nature? No, and this being the case, how is anyone responsible for the misfortune that occurs in someone's life due to that which is inherent in this universe, entropy? I find this chidlish wailing against others for the misfortunes of life to be not pitiable, and frightening in that people will take their frustrations of life out on others, and claim victimhood.
Grow up people! Tragedy will occur and yes we are powerless to do anything about it. All an insurance company is responsible for is what they mutuallly agree to with whomever has entered into a consensual business transaction with them. An insurance company and for that matter a doctor is under no obligation to provide any more than that which both parties agree to as an even exchange of property/service.

[NightAdder]

Where does choice fit into your assessment? When there is little or no options to choose from, people will sign up for what's available or nothing. How are these people at fault with bad insurance policies when there isn't enough competition in a lot regions of this country for good, affordable, and comprehensive health care?

[purplexed]

So start a better company. BTW the federal government does have the authority under the commerce clause to help by enabling interstate purchases. However, thee is simply no authority fo force a business to sell it's product at a certain price. It is rather the responsibilty of government to protect consensual, mutually agreed upon prices.

[WritusMaximus]

That's why rates have remained relatively stable, making it affordable for the masses, persons with preexisting conditions are the first ones to be accepted into the plans, and the last ones to be booted out, and of course those folks with misfortunes in their lives after enrolling in the plans can rest assured that their premiums/other out-of-pocket payments will remain relatively unchanged. This of course is what we have under the even exchange of service for money.

[BruceHNV]

Ouch. (of course the literal-minded will never grasp your meaning)

[Heartlight3]

"All an insurance company is responsible for is what they mutuallly agree to with whomever has entered into a consensual business transaction with them."

I don't know about you, but if I pay ever increasing premiums for health insurance, month after month, year after year, I expect the insurance company to pay whatever it costs if I get sick. I don't expect them to arbitrarily deny a claim or a treatment or drop me if I get sick. That's my contractual agreement with them. Their failure to live up to that agreement is one of the issues that needs to be addressed in this reform.

[luckybear]

Again you assume that insurance is the sole problem. It is certainly not. Profit margins for health insurance are very small. They are not pocketing the money. They are 85th with 84 other industries with higher margins. 86 cents on the dollar go to medical costs.

The other problems are cost shifting from medicaid and medicare under paying for services. Private insurance must pay higher rates when medicare only pays 80%. A public option would be similar to medicare and may actually make private insurance more expensive.

The AMA is a giant medical cartel that controls the supply of doctors. Ask why socialized medicine countries have MORE doctors even though they are certainly paid less. We need to let through more med students and build more med schools. Help MD's get through school with less than 250k in debt.

Non profit hospitals are allowed to keep millions in profits and have in some cases billions in cash; while paying their executives millions in salary. Hospitals also use their friends in congress to outlaw private doctors hospitals because big hospitals hate competition. Few hospitals will give you a straight answer when it comes to prices for services. They have different rates based on insurance, cash, medicare, uninsured etc.

This issue is much more complicated than "greedy" insurance companies. Tort reform (even Howard Dean admitted lawsuits cost the system significant money).

A public option can't squeeze much from 3% margins. This won't change no matter how loudly the left screams about profits.

[BruceHNV]

" It is certainly not. Profit margins for health insurance are very small. "

That's a false picture. They are so "small" because billions of dollars every year are spent on advertising, "administrative overhead" like plush retreats to the Caribbean, and LOBBYING>

[IndependentMiddle]

You don't need to worry Jason... there will be no trigger and no public option!

That part of the plan has been dead from the beginning and one more speech from Obama is not going to change anything. Unlike you, our President can count votes and he knows what is possible and what is not. Why do you continue to push this dead horse down the road hoping it will get up and run again. The Public Option is dead, get over it and let try to salvage some insurance reforms out of this!

The rest of this bill is on very thin ice, no one has come up with a tax plan that will pass to pay for this thing either so any heath insurance reform has very little chance to pass in any form this year and the more you cry over your fantasy of a public option, the harder it will be to get anything done...Again!!!

[luckybear]

I agree. Something is better than nothing. We can achieve significant progress towards universal care without a public option. Pre-existing conditions hurt many people. Having coverage dropped after getting sick would be a horrible experience. We don't have the votes for a public option; we won't get them either. If we don't get this done then it will not be done for years. Chances are unless the economy comes back strong we'll lose significant seats in 2010. Liberals like myself urge progressives to calm down and settle for the greater good.

Or take an all or nothing approach out of spite and let people continue to suffer. It's all up to fellow democrats now. We can get this thing done. The public option is done; get over it.

[WritusMaximus]

The following message is brought to you by Vote Straight Dem Party Line Regardless, a White House Task Force operation:

"Chances are unless the economy comes back strong we'll lose significant seats in 2010. Liberals like myself urge progressives to calm down and settle for the greater good."

Yup, let's keep them backstabbers, er, Blue Dogs and DINOS, in Washington DC for they are all dems, don't you know!

[RepugsOut08]

We continue to push this dead horse, because it's the only viable solution other than single payer.
The President NEVER promoted a public option because he never intended to ask for one.
A strong leader could have easily explained this plan to the people (and indeed the latest polls show folks overwhelmingly support a public option when it's explained to them), but Obama, apparently, always knew he'd be settling for an insurance friendly bill.
This problem is not going away, and putting a bandaid on this massive head wound will only keep the pain going with no cure in sight.
It's time to take a stand. If Obama won't do it, we'll dump him in the primaries, and find someone, Dem or Independant, who will.

[max hp]

A PUBLIC OPTION - DON'T REFORM WITHOUT IT.

Without a Public Option, you are delivering more to Private Insurance.
Without a Public Option, we are at the mercy of Private Insurance.
Without a Public Option, there is NO COMPETITION.
Without a Public Option, there is NO COST CONTROL.
Without a Public Option, there is MORE CARE DENIED.
Without a Public Option, we will be worse off than we are today.
Without a Public Option, we bend over - AGAIN.

Without a Public Option, the US is doomed to mediocrity.

No Co-ops, No triggers, No mandates, No tax gimmics. A Public Option is not just a good idea, it's a NECESSARY REQUIREMENT. Anything less is unacceptable.

I have NO DESIRE to contribute to the Insurance companies' profits. I won't stop anyone from doing so, but don't FORCE me into it.

WHY IS THAT SO HARD TO UNDERSTAND?

[luckybear]

We DO NOT have the votes. If you want any reform then we must pass the best bill we can. Do you reject the cap and trade bill too? The House cap and trade bill is very flawed but I support it because something is better than nothing. Health care is the same way.

If we get nothing done I will put the blame where it belongs; progressives who are selfish.

[WritusMaximus]

Careful there with your threats, for progressives can take it very personal and vote out "libs" (the same label you use) come 2012!

[RepugsOut08]

If we get nothing done, it will be because of a President who is either the most ineffectual leader in recent history (weaker by far than W who got almost every corrupt thing he wanted from his majority), or because our President never intended to buck the insurance industry.
With public opinion heavily on his side, before he allowed the debate to be taken over by the ignorant among us, it should have been realatively easy to promote and pass a public option.
No, neither I or any other progressives will accept the blame for this unnecessary policy debacle. It's Obama's cross to bear.

[sabredance]

Great post but you forgot a few other horrors:

1) The trigger essentially is a FLAT TAX that sends 12.5-15% of your income to insurance companies. At current threshold levels as proposed by Senator Snowe, nobody gets the choice of a public insurance plan until at least this amount -- 12.5-15% of income is exceeded. All an insurance company has to do is keep the premiums under that level.

2) To do so, insurance companies can cut benefits at will, such that physical therapy or diabetes equipment isn't covered, for example. In other words, you will be MANDATED TO BUY LOUSY INSURANCE.

3) Lousy insurance + flat tax = recipe to poison the public option. Were such legislation to become law, the resulting fury building over a few years would predictably be spun by the right and our corporatist media as a failure of public health care, setting us back decades.

The Trigger on the Public Option POINTS THE GUN AT THE PUBLIC OPTION.