By RICARDO ALONSO-ZALDIVAR for the Associated Press

WASHINGTON — Democrats are seeking a compromise on a bigger government role in insurance coverage as part of President Barack Obama’s proposed health care overhaul.

At issue is whether middle-class workers and families should have the option of a government-sponsored plan that would compete with private insurers. Obama and other Democrats support the idea, which Republicans adamantly oppose.

Sen. Charles Schumer, who is working on the issue for the Senate Finance Committee, said Thursday one potential compromise is based on insurance plans that most states already offer their employees. Obama’s health secretary nominee, Kansas Gov. Kathleen Sebelius, likes the idea.

Schumer, D-N.Y., said such a plan would avoid expanding a federal program like Medicare and that a private insurer possibly could run it. Sebelius already administers that type of plan in Kansas.

At a Senate hearing, Sebelius noted that more than 30 states “have a public plan side by side with private market plans in our state employee programs.” State workers, she said, “have an opportunity to take a look at which is best suited to themselves and their families. And there has been no destruction of the marketplace.”

The insurance lobby fears that a federally backed plan could drive companies out of business.

“We are taking a look at the different state employee plans to get a better understanding of how they operate,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.

GOP lawmakers “are going to need to know what’s in the fine print,” said Craig Orfield, a spokesman for Sen. Mike Enzi, R-Wyo., a leading lawmaker in the debate.

The issue of a public plan is a major stumbling block in deciding how to rein in health costs and cover the uninsured.

“My goal is to find a plan that would be acceptable to large numbers of senators,” Schumer said in an interview. “Right now, the private insurers are totally opposed, but maybe there’s room.” A public plan could serve broader goals, he said, by pioneering innovations that profit-driven companies might be slow to adopt because of costs.

The state employee plans Schumer is looking at are similar to how big companies insure their workers. Companies budget each year for health expenses, then hire an insurer to process claims, negotiate rates with doctors and hospitals and cajole employees to follow healthier lifestyles.

In California, the state sponsors three medical network plans for employees and retirees. These plans are offered alongside traditional insurance plans. The state-sponsored plans, administered by Anthem Blue Cross, account for about one-fourth of the 1.3 million people in the state employee health program, said Karen Perkins, a spokeswoman for the California Public Employees Retirement System, known as CalPERS.

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2 Comments

  1. Dr. Christine Adams on April 6, 2009 at 10:51 am

    What is this I hear about John Conyers endorsing HCAN? We need to make subsidies to for-profit private health plans off-the-table. People are so afraid of single payer that they can’t think calmly about how much better off they will be under HR 676. So, as a way to gradually allay their fears we could do an incremental approach as follows: What about a counterproposal to subsidies that would fit a public competitor model:

    Mandate inclusion in Medicare for All/single payer public program for ages prenatal to 25 years of age (to capture the healthy, cheap to cover population to balance the older, sicker population) and continue to include all those who currently qualify for Medicare in the public model. The money that is now included in Medicaid for kids and Chips funds this portion in addition to some additional taxes lifted from HR 676 financing. Private plans could offer supplemental insurance but NO Medicare Advantage plans allowed. Middle class families might like this since young families struggle with health care premiums for families.

    Then, the public competitor could also be open to everyone else to buy into if they would prefer that to the health insurance provided by their employer. Then the formula for NHI payroll tax of 3.3% on employee and 4.5% on employer could be collected in lieu of the payments to private plans. Or as an individual, you could pay the 7.8% NHI yourself to buy into Medicare for All/single payer. If the plan is to raise taxes anyway to subsidize private plans, we might as well raise taxes that go exclusively to the public competitor – with none of the taxdollars going to private plans.

    If you really want to “starve the beast”, instead of subsidies to for-profit plans, tax a percentage of their profits to fund the public competitor since they exclude people from having health insurance and need to pay into a public fund to provide care for low income households (instead of expecting the taxpayer to not only buy their own private health insurance but to also pay more in taxes to for-profit plans via subsidies to low and modest income households.

    Remember that Great Britain was only able to illegalize the slave trade by indirect legislation that prohibited general trade on ships that sailed under certain foreign flags/nationalities. They were constantly defeated when they tried straight forward anti-slavery laws.

    Everyone should pressure Peter Orszag (OMB) to persuade the Obama Administration to endorse single payer. He crunched the numbers while at the CBO and must know that single payer makes the most sense as a way of controlling costs while maintaining quality and covering everyone.



  2. Terry Brauer on April 6, 2009 at 11:38 am

    Remember how Bush hyped and used defective ‘intelligence’ to fit his mission of invading Iraq?

    Some of us even remember the ‘mission-creep’, which ultimately afforded our generation the Vietnam Debacle and residual miseries thereof!

    It appears that some Democratic Senators have launched an analogous healthcare mission-shift.

    The original ‘mission’ and national conversation were about expanding healthcare access, controlling costs, improving quality, and enhancing patient safety. Remember? Some called it univeral healthcare.

    The U.S. Senate, as Senator Schumer is demonstrating, … and DHHS Secretarty-designate Sebelius has tentatively greeted with glee … a movement of the mission from development of a cost-effective, accountable universal healthcare system to … an agenda of political compromise … preserving the egregious insurance marketplace … and playing nice to effect bi-partisanship.

    GOP Senators have launched another mission-shift: make absolutely certain that nothing proximate to the comprehensiveness or rational features of single-payer OR the Obama Plan gets passed … or face certain electoral extinction (according to the Cato Institute).

    Has anyone noticed that the $3.5 Trillion budget passed in Congress last week was unscented with bi-partisanship?

    However, there is something ‘Congressional’ about throwing together a collage of state employee health insurance programs to determine what sticks. The fact that no one has analyzed the cost, pros, and cons of these programs appears to be immaterial. Their impact on controlling costs and changing provider behaviors has yet to be evaluated. Never mind! As long as the new mission isn’t quite what was promised throughout the 2008 election cycle — the same healthcare coverage that Congress has — and keeps the insurance industry in the game, the public can be moved to accept the new mission packaged as ‘reform’.

    Peter Orszag will need to dance quickly away from his comments to Jon Stewart April 1 in which he asserted with conviction that healthcare cost containment is the ball game … the panacea … the ultimate fix! He couldn’t have been more explicit!
    http://www.thedailyshow.com/full-episodes/index.jhtml?episodeId=222770

    So, Senators Schumer and Enzi … venerable colleagues of same … Secretary-designee Sebelius … when you have a plan … which fits the shift in missions, which the delusional and clueless can believe in … and rewards the interests of AHIP … let America know!

    Let the word go forth from some time and some place that a mission of political compromise … false choices … and insurance industry preservation … has supplanted universal healthcare.

    P.S. New Yorkers — Please forward the above url to the April 1 Daily Show to Senator Schumer. Thank you.