kick football

Please don't kick the football

I saw some liberals getting excited about this New York Times description of a nationwide health insurance plan that they cleverly tried to posit as the by-product of the public option.

The nationwide plans would get contracted out by the federal government and be available to consumers in the insurance exchanges. National plans, government-run? Sounds like a public option, right?

Well, no. Multi-state health plans will be made available to exchange recipients. But they will merely be contracted out by the federal government, and run by a private insurance company. This was devised as an admittedly weak substitute to the public option, and nobody who actually understands the Affordable Care Act is presuming that this is in any way the same deal.

These plans are not, however, actual public options. “This is not government-sponsored, and it’s not a public plan,” says Tim Jost, a law professor at Washington and Lee University who focuses on health policy. “These are plans that contract with the federal government.” [...]

No one at the time, however, thought the multi-state plan would work much like a public option at all. “It’s not really similar at all,” says McDonough, now a professor at the Harvard University School of Public Health. “It’s something that’s going to be more like one private plan choice.”

One of the two plan administrators has to technically be not-for-profit, but then again, so is Blue Cross. The plans look more like the Republican vision for the health insurance market, the sale of insurance policies “across state lines,” more than anything. They may create “competition” for the existing plans within an exchange by simply evading regulations under state laws. If the nationwide plans get enough subscribers, they may bargain providers down on rates, which could lower the cost of health care. But more likely, they would merely offer bare-bones insurance that doesn’t have to comply with the same requirements as other exchange participants. Therefore they will look like a good deal for consumers, while actually being junk insurance that doesn’t offer the same benefits as the other plans. The nationwide plans have some criteria, and the feds must sign off on some of their framework, but there’s ample room here for a nationwide provider to deliver fairly useless insurance at a low price and make a good profit.

The need to offer a substitute to placate those desiring a public option created this Frankenstein monster, which was admittedly not well thought-out. Those who did it ended up with the worst of all possible worlds; no public option supporter really even knew about these multi-state plans, and they have the potential to disrupt the exchanges and cause a race to the bottom.

As long as we’re in hurricane mode, I’ll quote George W. Bush by saying: “Heckuva job.”

Photo by Jeffrey Beall under Creative Commons license