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Jason Rosenbaum

Jason Rosenbaum

Posted: September 23, 2009 12:48 PM

The Snowe Trigger: A Catch-22 to Kill the Public Option

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Olympia Snowe's trigger is a plan to kill the public health insurance option. Not kill it as in make it weaker, but kill it as in make absolutely sure it will never, ever come into existence.

Senator Snowe's trigger is literally a catch-22, defined by Wikipedia as "a set of rules, regulations, procedures, or situations which present the illusion of choice while preventing any real choice."

Mike Lux explains:

The legislative language says that a public option will be set up in a state in which health care is not affordable to 95% of the state's residents, but it defines affordability as after the new tax credits that are written into the bill to make health care affordable.

Let's break that down.

In Snowe's trigger amendment, if affordable coverage is not available for 95% of a state's residents, then you get a public option in that state. While there are issues with state-based public health insurance options, the catch-22 comes with Snowe's definition of affordability.

Affordable is defined as 13% of income. So, if there is no plan in the exchange that costs less than 13% of a person's income, we'd get a public health insurance option. But that calculation of what a plan costs is made after the government pays out subsidies or employers pay their share. And therein lies the catch-22.

Max Baucus's bill caps out-of-pocket costs for people buying insurance in the exchange at 12% of their income. Therefore, after you add in government subsidies, costs will legally always have to be below 12%. The insurance industry can raise their rates as much as they want and government will make up the difference. The trigger, if passed, will never trigger. Not ever.

(This opinion has historical weight - there is a trigger for prescription drugs in Medicare Part D. So far, after 6 years, it still hasn't been triggered. Meanwhile, the pharmaceutical industry rakes in the profits and seniors get screwed - a Families USA report [pdf] showed that private drug prices were an average of 58% higher than prices the government could have obtained through a public option. The fact that this trigger was never triggered costs government and seniors hundreds of billions per year, money that goes straight into the pockets of private pharmaceutical companies.)

It's clear: No public health insurance option anywhere in the country will ever be created under Snowe's trigger amendment.

The trigger amendment isn't a fig leaf. It isn't even a co-op. It's a plan to kill the public health insurance option outright, and give taxpayer money straight to private insurance companies.

Why does Senator Snowe want to deny choice and competition to her constituents, something they want? Why would she rather bail out the private insurance companies?

In a poll conducted September 14th by Lake Research Partners of 400 likely voters in Maine (with a margin of error of 4.9%), a strong majority - 58% - favor the creation of a "a public health insurance option to compete with private insurance companies."

When asked if they favor or oppose "requiring everyone to buy and be covered by a private health insurance plan," 55% of Mainers are opposed. When asked if they favor or oppose "requiring everyone to buy and be covered by a health insurance plan, with a choice between a public option and private insurance plans," 55% favor.

If you ask Mainers if they should be required to buy private insurance, they're against it, but if you ask them if they should be required to buy insurance, with a choice of public or private, they're for it. The numbers exactly flip.

The poll numbers further comdemn Snowe's trigger. We asked people which statement below comes closer to their view:

  1. The public health insurance option should be a back-up; we should only offer it in case reforms to private health insurance companies don't result in making health care affordable for most people.
  2. Because people are going to be required to buy health insurance, we need to offer the choice of an affordable public health insurance option to provide competition so that people aren't at the mercy of private insurance companies.

By a 54% to 24% margin, Maine voters chose the 2nd statement.

It's clear the people of Maine understand that a trigger for a public health insurance option is not health care reform. They get the essential question: Will the private health insurance companies finally face competition, or will they keep their government-supported monopoly to continue screwing you over with skyrocketing rates and serial denial of care, subsidized with your taxpayer dollars.

94% of insurance markets in this country are not competitive. This has led to rising costs that squeeze families and business as the insurance companies rake in the profits. As Senator Chuck Schumer said, "Any reasonable criteria for triggering a public plan has already been met."

The private insurance market has failed, and we've given them enough second chances. The American people support a public health insurance option that's available on day one, not a bailout of the insurance industry. President Obama has said that a public health insurance option is his first choice to lower costs and increase competition. Senator Snowe should not stand in the way of the people of Maine or the rest of us for the sake of the insurance companies.

(also posted at the NOW! blog)

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