Democrats seek compromise on health care plan

by Lesley Politi on April 10, 2009

Democrats seek compromise on health care plan

WASHINGTON (AP) — 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.

The state employee plans are similar to how big companies insurer 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.

The idea of using the state employee plans as a model came last month from two policy experts, Len Nichols and John Bertko.

“We were just trying to avoid nuclear war,” said Nichols, director of health policy for the nonpartisan New America Foundation. “We saw advocates of Medicare for all pushing to put the country into Medicare. And we saw the right using that to push the moderates out of engagement in the health reform debate.”

In an interview, Schumer said he is looking at Nichols’ idea as a possible compromise and is beginning to sound out other Democrats. He said he has some room to maneuver because Obama and many Democrats did not spell out what they mean by a “public” insurance option.

But Schumer said other Democrats insist that option should look like Medicare, in which the government directly sets benefits and payment rates.

Mark McClellan, a health policy expert who ran Medicare under President George W. Bush, said Nichols’ proposal was “well meaning,” but that the government is much bigger than any state, so the effects of a federally backed plan on the insurance market would be far greater.

“At this point, I don’t know many Republicans who are confident a public option could work without making it look like another private sector choice,” said McClellan. “And then what would be the point?”


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