While some are celebrating the newest public option compromise as a solution to the political deadlock on Capitol Hill, Senate leaders have already begun watering down some of the strongest elements of the new plan, which is combines a Medicare buy-in, a Medicaid expansion, and the inclusion of private non-profits in the exchange modeled on the federal employees’ plan.
This afternoon, Jay Rockefeller said that the new proposal to expand Medicaid coverage for those who are 133% to 150% above the federal poverty line was dropped during a meeting of key legislators this morning. “I was sad this morning,” Rockefeller told me and a few other reporters. “We walked in, and it was 133[%] to 140[%], then it’s staying at 133... So we didn’t get anything.”
While Rockefeller didn’t explain why the rollback had happened, Kent Conrad--who was also at the meeting this morning--suggested that the Medicaid expansion might be politically untenable because of the expected pushback from state governments, who would have to contribute in part to its funding. “We spent weeks and weeks and weeks negotiating with the nation’s governors [in the Finance Committee],” Conrad said after the weekly Democratic caucus lunch. “When you start to change the formula, you put that all at risk.”
And although he described himself as being “intrigued” by the newest public option compromise being put forward, Conrad also reiterated that would oppose a Medicare buy-in that did not address his concerns about low payment rates to rural hospitals. Moreover, he added, “from a national perspective, you’d have to be concerned about the effect on the national pool,” referring to the concern that the 55 to 64 year old population added to the Medicare pool tends to be a sicker population. When asked how he’d resolve these issues, Conrad said that he’d propose having the Medicare buy-in be treated as “a separate pool” that could have negotiated rates, rather than those set by the existing Medicare program.
But, as the House negotiations over the public plan made clear, having negotiated rates for the Medicare buy-in would severely diminish any cost-saving potential for the proposal, significantly increasing the cost of the plan in the bill. And the elimination of the Medicaid expansion makes it unlikely that the final conference bill will include the 150% rate that’s in the House bill. Finally, as Rockefeller noted today, the attempt to include non-profit options modeled on the Federal Employees Health Benefit Plan “has nothing to do with federal employees,” who receive subsidies far higher than many would get in the exchange. In the absence of robust reforms to the newest compromise--and a strong defense against further rollbacks--the proposal would be much less likely to contain costs or expand access, making it questionable whether it’d be a worthwhile compromise at all.