Key Congressional Democrats Ask for Public Option Plan Ideas

The Colorado public option bill would require all health insurers operating in the individual or small group market to offer public option plans, and it would normally leave public option plan provider network design up to the carriers. But, if a carrier had a hard time creating an adequate provider network in a county, the Colorado insurance commissioner could require a provider to participate in the carrier’s public option plan in that county.

The insurance commissioner could require doctors to participate in a public option plan’s network for reimbursement rates as low as 135% of what Medicare would pay for the same services.

The Nevada public option program would take a different approach. It would create a provider network by requiring any provider that treats Nevada state employee health plan enrollees or Nevada Medicaid enrollees to treat public option plan enrollees.

The Nevada program includes an escape clause: If a requirement to treat public option plan enrollees chased many providers out of the Nevada state employee health plan network or Medicaid network, state officials could save the employee health plan and Medicaid networks by loosening the public option plan participation requirements.

The Murray-Pallone Request for Information

Murray and Pallone posted a request for information about the public option program concept last week.

Responses are due July 31.

Here are the questions in the request for information:

1. Who should be eligible for the public option? Should a federally administered plan be available to all individuals or be limited to certain categories of individuals (e.g., ACA Marketplace eligible individuals, private employers and individuals offered employer coverage)?
2. How should Congress ensure adequate access to providers for enrollees in a public option
3. How should prices for health care items and services be determined? What criteria should be considered in determining prices?
4. How should the public option’s benefit package be structured?
5. What type of premium assistance should the Federal government provide for individuals enrolled in the public option?
6. What should be the role of states in a federally-administered public option?
7. How should the public option interact with public programs including Medicaid and Medicare?
8. What role can the public option play in addressing broader health system reform objectives, such as delivery system reform and addressing health inequities?

Murray and Pallone have asked commenters to send responses and questions to Saha Khaterzai, with the House Energy Committee, at [email protected], and Colin Goldfinch, with the Senate HELP Committee, at [email protected].

What This Means for Financial Professionals

The public option plans described in current legislation may not necessarily do much to disrupt the commercial health insurance market in the short run.

In Washington state, for example, observers have noted that the first Cascade Care plans have been more expensive than ordinary health plans and have sold poorly.

Here are five reasons why the public option plan legislation could matter to professionals who help clients with life insurance, annuities, investment advice and general financial planning, as to professionals who help clients with health insurance:

• Debates over public option bills may increase the overall financial and insurance literacy of lawmakers and aides.
• The debates may give health plans’ lobbyists a chance to talk to policymakers about the tradeoffs between rich benefits, generous underwriting rules, flexible provider contracting provisions, and plan costs.
• Failed public option plans may embolden policymakers who oppose any government involvement in health finance, or who contend that government-administered, single-payer health plans are the only good solution for paying for health care.
• Some public plan option programs may create bidding opportunities for agents and brokers with the ability to act as public option plan administrators.
• Any successful public option plan programs could create opportunities for agents and brokers to sell wraparound policies designed to complement the programs’ benefits.

Pictured: Sen. Patty Murray, D-Wash. (Photo: Diego M. Radzinschi/ALM)