Prospects Dim for Public Plan

Numerous left-leaning organizations, such as the Campaign for America's Future, argue that health reform without a public option would be virtually meaningless, and that 72% of Americans recently surveyed want a government-run plan similar to Medicare for people under 65 who have no other options.

Supporters of a public plan say that the option would allow workers to choose a public plan even if they have employer coverage, which may prompt better private insurance plans.

The theory is that private insurance plans might behave better, reinvest more money into the plans, and make their terms more understandable and functional for employers and members.

These pro-public plan groups for now are not speculating whether they have a plan B if the public plan is defeated.  Tighter insurance industry regulation will not be nearly enough to appease them because it will take too long to implement and enforce, and may depend on state-by-state laws.

But others argue that a public option isn't needed and that the insurance industry can cover the uninsured as long as there are subsidies for poor Americans' healthcare.

"It's hard for me to believe that if (a public option) is not in the package, that the package is a failure," says Beth McGlynn Associate Director of Health for the Santa Monica, CA-based Rand Corp.

She says the public option is new to the debate and the Senate Finance Committee wasn't even considering the idea last year.

"People are posturing politically for what they want, and rhetoric is a piece of the posturing," she said.  "The fact is, there are a number of steps forward or changes that could be made that could be considered successful reform without the presence of a public plan."

If there is no public plan, a huge question remains regarding how Congress intends to make sure that:

• Insurance companies offer plans to everyone and don't stall or cherry pick


• Everyone not otherwise covered is able to purchase a private plan or are insured through another program, such as a cooperative, Medicare, or Medicaid

"The real questions is whether Congress chooses to have those items be determined by voluntary compliance, which is what the (health insurance) industry is proposing, or whether Congress is going to choose to legislate that compliance and make it mandatory," she said.

But there's going to have to be some changes in the way private insurance companies do business, that's for sure.  Health plans will have to stop denying health insurance to anyone with a pre-existing condition or even the hint of one.

America's Health Insurance Plan spokesman Robert Zierkelbach says private plans are willing to make many concessions. However, there would still be variations in plan pricing, based on the applicant's age, place of residence, family size, and benefit design, he said. "If you would want more protection, you would pay more for that," he says, similar to various options for property or automobile insurance.

At this point, insurance companies might be willing to make those adjustments in order to not have a public plan competing against them.