Public Option Plans
There are four Public Option bills – S 3 (Cardin), S 1261 and HR 2462 (Merkeley and Richmond), S 981 and HR 2000 (Bennett, Kaine and Delgado), and HR 2085 and S 1003 (Schakowsky and Whitehouse) . They give participants in the Exchanges (like Covered California) the option to choose a plan offering Medicare coverage. Some increase premium assistance and cost sharing reductions; others do not. All leave existing coverage through Medicare, Medicaid, CHIP, and employer plans unchanged.
All persons eligible to participate in the Exchanges (the Marketplaces) are eligible to purchase the public option (Medicare buy in). The Merkeley/Richmond bill is more expansive – those not eligible for Medicare, Medicaid, or CHIP can enroll – leaving open the potential for employees who wish to drop their employer’s coverage to enroll and the uninsured who are not eligible for Medicaid because their state’s government has decided not to participate in the Medicaid expansion to enroll. These Public Option bills do not appear to me to cover the undocumented.
In the Merkeley/Richmond bill, large and small employers and the self-insured employers can offer the public option through the Exchanges. In the Bennett/Kaine/Delgado bill, small employers can buy the public option through the Exchanges.
Enrollment is through the same procedures and under the same rules as currently exist in the Exchanges.
Benefits are the ACA’s ten essential health benefits. In other words dental, vision and long term care are not covered. Federal and state restrictions on abortion – i.e. the Hyde limits and state variations on Alabama, Missouri and Ohio restrictions on reproductive services do not apply.
In general, cost sharing follows the ACA rules – bronze, silver, gold and platinum; however the Merkeley/Richmond bill sets the new reference plan at the gold level (i.e. 80 insurance coverage and 20% patient cost sharing) for all marketplace participants.
Premiums follow the ACA rules – 3/1 age rating, geography, tobacco use and family size. Premium assistance is expanded to individuals with incomes between 400 and 600% of FPL (about $155,000 for a family of four). In the Merkeley/Richmond bill, the reference plan is increased from the second lowest cost silver to the second lowest cost gold, which will help all Exchange participants afford better coverage. In addition, it enhances cost sharing subsidies as follows – 100 to 133% of FPL 94% actuarial value (AV); 133-150% 92% AV, 150-200% 90% AV; 200-300% 85% AV, and above 300% of FPL 80% AV. These changes will be enormously beneficial in improving affordability of coverage and of health care to Exchange participants.
All Medicare participating providers participate in the public option unless they opt out. Others with valid state licenses may opt in. Medicare reimbursement rates apply. Alternative payment methodologies are encouraged; the Bennett/Kaine/Delgado bill is the most permissive and encouraging for the HHS Secretary to encourage alternative payment and delivery system reforms. Medicare balance billing restrictions apply. The Secretary of HHS negotiates prescription drug prices for the public option plan and for Medicare Part D as well.
The Merkeley/Richmond and Bennett/Kaine/Delgado reestablish and fund reinsurance for the most costly individuals in the individual insurance marketplaces to improve premium affordability.
Premiums are set to cover program costs. There are small allocations for start up costs. There are prohibitions on contracts for reinsurance to transfer risk to outside entities.
Comments: In my humble opinion these are all good starting points to improve the ACA; however they do not cover the undocumented and they may not pick up the uninsured in those states like Florida, Texas and Georgia that have refused to participate in the Medicaid Expansion. The Merkeley/Richmond bill has the best components to improve affordability of premiums and access to care.
Prepared by: Lucien Wulsin