Minnesota has a Democratic Trifecta. It is a narrow trifecta, but it is a trifecta. It seems like the state government wants to do something about health policy and coverage.
Whoa, @GovTimWalz is proposing a “public option” insurance plan in Minnesota! Very curious for the details when they come out! pic.twitter.com/1g0E0KtHlq
— Zach Levin (@ZachLevinTweets) January 23, 2023
My question is what is the point and objective of a public option?
This is a key question. Emma Sandoe and I wrote a framework on how to evaluate Medicaid Buy-in programs in 2018 that I think is still relevant today:
The policy should be judged based on how the programs serve the policy maker’s intended goals. Medicaid buy-in proposals can achieve multiple goals. Each advocate may lay out their goals of this policy differently, but whether the details of their plan meet their stated goals can be determined using the criteria outlined in this post.
There are two different policies that can be described as Medicaid buy-in programs. The first would be creating a new eligibility category for direct purchase of Medicaid by individuals with all of the attendant rights, obligations, and services that flow through Medicaid. This version of Medicaid buy-in requires modifications to state plan amendments and likely will require an 1115 waiver. The other policy would be to use the framework of Medicaid managed care contracts and networks to create metal plans for purchase on the Marketplace. Policy makers must identify which type of Medicaid buy-in they intend to use to communicate clearly their goals and objectives.
What is the problem a public option is trying to solve?
The original Hacker public option was a competing insurance plan financed and organized by the government that would place massive amounts of competitive pressure on pricing and hopefully quality in the individual market. The pricing advantage would come from the government’s ability to administratively set prices at or near Medicare levels. This was scored as a major cost reducer by the Congressional Budget Office. It was killed by the Senate in 2009.
Since then, the public option as a concept has been amorphous. Washington and Colorado both have programs that they call a public option. In both cases, there is not a single public option but a plethora of privately offered and managed plans that have a bit more state regulation on them the other plans in the marketplaces.
Minnesota has expanded Medicaid. It, along with New York, runs a Basic Health Program (Section 1331) where individuals earning between 133% and 200% FPL are placed in a state run program instead of the ACA marketplaces. It has reinsurance for higher income affordability challenges.
I am trying to figure out how more choices helps with uninsurance and underinsurance. Adding a new plan that is likely to be priced fairly similarly to other plans in the market won’t do much if the problem is affordability. If the problem is complex navigation pathways to enroll then a public option is unlikely to be helpful.
What is the problem that is trying to be solved with another public option?
I’m stuck!
Betty Cracker
The original Hacker public option as referred to above makes sense in theory because, as you put it, it “would place massive amounts of competitive pressure on pricing and hopefully quality in the individual market.” But calling privately managed plans a “public option” seems kinda pointless to me.
itstrue
The Public Option idea is drifting further and further from its original intent, which was to create a health plan that had the law behind it in paying less for health care and therefore lowering enrollee’s expenses. My first disappointment was in realizing that, like the ACA exchanges in general, even the 2009 version would only have applied to the individual market, which is like 6% of American covered lives. Subsequent disappointments from the CO and WA models have been about how they’re priced– just enough to lower premiums by a few percent. What are they doing other than putting out a fig leaf saying they’ve created a Public Option and are therefore good lefty politicians?
The whole “Public” thing is attractive because “Public” health coverage is cheaper. It’s cheaper because it pays providers less. Setting aside whether providers could get by on Medicare rates, this is what you ought to get if you’re going Public– the 800lb gorilla of the state setting prices. Otherwise, why bother?
A Public Option that meets the initial policy intent of enhancing affordability and increasing coverage would be something like opening Medicare (or Medicaid) to everyone– employer-sponsored beneficiaries, individuals, and let competition do the rest. It would be a lot cheaper. The problem is that public plans pay half or less of what the big-ticket self-insured commercial plans pay, so providers scream bloody murder.
Still, I have to wonder how Canadian (or British, or French, or Italian…) hospitals, specialists, and PCPs get by on often sub-Medicare rates while ours claim this is impossible. They’re really just a bunch of powerful pigs at the trough.
Another Scott
Made me look. It looks like Walz has been offering various options (heh) for a while. As you say, the Devil’s in the details.
E.g. MacPac.gov (from 4/2020):
This seems to be the ONECare bill (from 2019).
Thanks for keeping your eye on this stuff for us.
Cheers,
Scott.
David Anderson
@itstrue:
To be an economist (adjacent) — costs are not exogenous to revenues in response to your ending statement —
“Still, I have to wonder how Canadian (or British, or French, or Italian…) hospitals, specialists, and PCPs get by on often sub-Medicare rates while ours claim this is impossible. They’re really just a bunch of powerful pigs at the trough.”
Ohio Mom
Climbing back on my soapbox. It is too bad that Medicaid is associated with being poor and thus considered somehow sub-minimum.
Ohio Son’s Traditional Medicaid is the most comprehensive and hassle-free coverage any of the three of us has ever had. No fine print to wade through, and because our area teaching hospital is covered by a local indigent care levy, he gets his choice of top notch doctors (the levy pays the difference between Medicaid’s stingy compensation and what the hospital needs to keep going).
I wish this model could be universal. Would be much better than Medicare for All with its choice between “free” Advantage plans full of hidden costs and restrictions, and a multi-part Traditional plan that requires hours of researching the best Gap and Drug plans and monthly premiums.
(What a sleight of hand that is, calling the fee to enroll and stay in in a health insurance plan a “premium” like it is some sort of prize (google tells me the definition of premium is “a reward or recompense for a particular act ; b · a sum over and above a regular price paid chiefly as an inducement or incentive.” It’s a BILL, not a bonanza).
MomSense
The problem with the public option was that the version passed by the House did not tie reimbursement rates to Medicaid or even to Medicare and therefore it would not have provided a competitive option. Behind the scenes we all believed that a competitive public option would have helped the transition to single payer but the version passed by the House would have ended up functioning more like a high risk pool which would have made it really expensive and defeated the purpose.
So it wasn’t included in the Senate finance version but those of us working on passing the ACA felt that the House killed it – well rendered it mostly dead.
I was part of the HCAN team working to pass the ACA. I was actually a volunteer but considered like staff and was spending just about full time hours every week. Ended up having one of the only in person conversations with Sen. Snowe and getting valuable info on her position and, more importantly, on Baucus’ position.
MomSense
@Ohio Mom:
I’m right there with you on the soapbox. Medicaid is far superior but the Sandernistas don’t actually want to be associated with anything that sounds like it might be for the poors. Also too they are low information sometimes voters.
Mike E
Wow, at least MN is mulling a public opinion…as you know, we here in NC are waiting for
Godotthe much talked about Medicaid expansion/alternative though the odds have steepened against it. Alas.jonas
Everyone — doctors, nurses, techs, etc. — gets paid a lot less. European doctors are simply gobsmacked at what their American counterparts earn.
Kim Walker
Just wanted to point out that the Canadian health care system is a bunch of separate provincial systems that get a top-up from the feds. The way they make it happen is by allowing a number of bad practices. The family physicians choose which patients (tax-payers/citizens) they would like as patients. They cherry-pick. Then provinces only allow a limited number of seats in medical schools, keeping the numbers of physicians low. The residency authority allocates about half of all residency seats to specialties and the other half to family doctors. I have no idea what the medical administrative situation looks like WRT administrative bloat. Oh, and they also kept the numbers of nurse practitioners absurdedly low. They are short tens of thousands of health care workers. And even though they have been recruiting overseas doctors and nurses, and have spent 10s of miliions of dollars on setting up assessment systems for experienced overseas physicians, it has really been performative – each provincial assessment system is very Catch-22. Almost no one makes in or through the process. The situation for nurses is very similar. For the people here it means that about 25% of us cannot get a family doctor to even access the health care system. If you need a urologist of oncologist or any specialty you will wait additional years with a referral. I’ve been waiting 14 years, but I’m an english speaker in a french speaking province, so it is unlikely I will ever get a primary care practitioner. It feels very much like an exercise in survival of the fittest. Also worth noting is the cost of Canada’s really bad health care is number 2 behind the US (“we’re Number 1!”) and not by much.
I was in England for a couple of years prior to the Tory regimes and found the care to be excellent. There were two medical clinics in town to pick from and I could generally get an appointment within 2 days at most. If it was urgent, I could go in and just wait for the nurse practitioner on duty. That never took more than 2 hours.
In the states I always had decent insurance and never minded the $10 co-pay, but I also had no chronic conditions.
Hob
@Ohio Mom: What a sleight of hand that is, calling the fee to enroll and stay in in a health insurance plan a “premium” like it is some sort of prize (google tells me the definition of premium is “a reward or recompense for a particular act ; b · a sum over and above a regular price
No— this isn’t a case of someone trying to put something over on you, it’s just the English language and its confusing evolutionary history. Google pointed you to incomplete information.
The sense of “amount to be paid by agreement for a contract of insurance” is from 1660s, from Italian premio. The adjectival sense of “superior in quality” is first attested 1925, originally in reference to butter. Figurative use of the phrase at a premium “at more than the usual value” is by 1828.
Premio in Italian did and does have a similar connotation of being an extra fee, but that’s because insurance in the early modern era wasn’t a mass-market consumer concept and wasn’t considered a basic necessity. It was a business arrangement specifically to cover shipping accidents, and this up-front payment was seen as a reward to the insurer— an incentive for taking on the risk and promising to pay expenses if the ship sank.
itstrue
@jonas: I was just looking at the NHS pay tables for MDs and was gobsmacked myself. I figure that in the end, it’s simply hard to get powerful people to pay themselves less, so that’s why we can’t have nice things like real public options or Medicare for All.
Hob
@Hob: Whoops, I’m writing too early in the morning. I meant to say that premio is an extra thing not as in a fee, but as in a reward— an incentive for someone to underwrite a venture that might fail (like a sea voyage).
jonas
@itstrue: Yep. You’re never going to get healthcare providers in the US to agree to a 50% across-the-board pay cut. That’s what we’d be talking about if our pay rates were on par with most other countries with national or single-payer systems.
Jesse
@itstrue: in Germany, health care is very expensive, similar to the US. (If you’re very poor, then it’s either very low cost, if not free, again similar to the US.) Family of four paying €2400/month. (Do t let anyone tell you health care is free or very cheap in Germany.) I guess you could say there’s a public option here, in the sense that there is a while class of health insurance — run by private companies, not the state — which offer essentially interchangeable services and drug prices, which are legally capped.
One big downside us that the prices the drug manufacturers and doctors and medical labs and hospitals get are capped at rather low levels, not unlike with Medicare. Result: essentially all drugs are generic, doctors (surgeons, etc.) are surprisingly low paid (many leave Germany to get paid better elsewhere). If you are insured “privately” (again, though private companies, not the state), you encounter doctors who offer you all sorts of unnecessary services so they can get their extra money.
Barbara
@Ohio Mom: I tell people this all the time. Medicaid is hands down better than Medicare in terms of benefit simplicity. Medicare gets the love because Medicare gets the money, but its benefit design is horrible. Most people who cry “Medicare for all” have no idea of how many gaps there are in Medicare coverage. Medicare beneficiaries almost always have some kind of private coverage, whether an MA plan that integrates benefits in a way the FFS coverage does not, or a supplemental plan that pays on top of what FFS pays. Medicaid doesn’t require any of that, though now, in most states, most beneficiaries get benefits through private plans.
Brit in Chicago
@jonas:
“Everyone — doctors, nurses, techs, etc. — gets paid a lot less. European doctors are simply gobsmacked at what their American counterparts earn.”
This is true and important. It’s also true that European doctors don’t leave medical school hundreds of thousands of dollars in debt. They certainly have better systems (some variety among them, but probably all of them better), as do the Canadians, but getting from here to there will not be easy [less optimstically in the subjunctive: would not be easy].
Fake Irishman
I’m still interested to see what the medium term ramifications of the CO and WA plans are. Setting a fairly soft cap on reimbursements (e.g 180 percent of Medicare) may not do much in the short term, but might it act as a long term brake on escalating private sector costs? If it does that, the payoff would be subtle, but substantial over time.
The only way to constrain salaries and spending of a powerful political class is to do it subtly and quietly.
jonas
@Jesse: The first time I lived in Germany some years ago, I commented to someone about how pharmacies really pushed homeopathic and herbal remedies and was told that because reimbursement rates for drugs and other pharmacy services are so low, most Apotheken rely on retail sales of “alternative” medical products to make any money. I don’t know if that’s why Germans seem to be really into that stuff, or that they’re into it because that’s what the pharmacist always recommends instead of a prescription drug.
Poe Larity
Speaking of Minnesota, I ran into these guys last night on a flight to MSP:
The program is: https://protezfoundation.com
And they’re in Oakdale. Non-profit and they’re looking for local hosts for Ukrainian victims.
itstrue
@Kim Walker: Sorry to hear you’ve had a tough go. Following the news in Ontario, it sounds like a similar situation. I have a number of friends in BC, where the situation sounds better. My understanding is that the Canadian gov’t gives about 40% of the funds needed by the provincial systems to comply with the Health Canada Act, and that every province is forever trying to make that work with a limited set of tools. My read as an outsider is that this is usually addressed by throwing more dollars at the problem (sounds familiar), with the provinces and the feds arguing about who gets to raise taxes.
Here in the States we just pass costs onto the consumer instead of taxing them, and with few real checks on those costs to change the dynamic. I wish it was still a $10 copay here, let alone the now-common $2,500 deductible no one had 20 years ago. And that’s “good” commercial coverage.
It’s interesting to hear your insights about advance practice nurses, med school slots, immigrant clinicians, etc. factoring in where you are. At least that’s a set of policies that doesn’t simply involve more money.
Someone once said (I think it was Uwe Reinhart) that all health systems everywhere are always in a state of crisis. From where I sit, I’d rather have Canada’s health finance and delivery crises than ours. Easy for me to say, of course. Good luck to you.
itstrue
@Brit in Chicago: It would have been a lot easier if we’d addressed it in 1948 as the UK did, when medicine was still mostly aspirin and bed rest. It’s a whole different problem now.
Another Scott
@Brit in Chicago: Cultural differences are a big thing.
When I was in EE grad school a fellow student from Iran said that there engineers (and maybe architects) occupy the social status slots taken by physicians and lawyers in the USA.
We don’t have to pay physicians as much as we do in the USA, but changing their relative status (and pay) will be a long-term challenge. Change is hard!! Nobody wants a cut in pay or a change in status!
Thanks.
Cheers,
Scott.
Ohio Mom
@Barbara: Most Ohio Medicaid participants are in managed care plans, as you observed. The managed care plans advertise heavily so it is just about impossible not to be aware of their existence.
But because Ohio Son has a Medicaid Waiver (he qualifies as a result of his disability) he is allowed to be in traditional Medicaid. I don’t understand this loophole but I will never question it!
I know our circumstances are somewhat unique. I grew to appreciate them even more when I turned 65 and saw what Medicare was really like.
Jesse
@jonas: interesting suggestion — never heard that theory about homeopathy, but it could be contributing to its popularity here. I attribute it to general distrust of doctors, drugs, medicine that flabbergasts me even today. They think that medical practices are about as reliable today as they were in the 16th century. Homeopathy asks us to go back to 6th century scientific thinking.
One thing to keep in about this: Germany is a hotbed for the antivax movement. It is most definitely not simply a US thing. Many parents don’t vax their kids. (this was true pre-corona. The first anti-vaxxer I ever met was in Stuttgart.)
davecb
Ontario, in Canada, has a republican-like government which is trying to drive nurses out of the public system with a pay freeze, and has just announced a push toward more private clinics.. without a pay cap.
I was without a family doctor for a while, but large cities have enough walk-in clinics to bridge for a while. Urgent problems get handled well and quickly: I swear I got slapped into a diagnostic bed from Start Trek and told “you are not currently having a heart attack” when I was having chest pains. Important-but-not-urgent problems can seem to take forever: due to COVID, that’s become a real danger.
University costs are higher than the EU, but not as bad as the US. Similarly, pay rates are higher than the EU, but appear to be less than the US. Doctors and nurses normally are well paid.
This year, the provinces finally agreed to report results from money given to them by the federal government. Some provinces viscerally hate both medicare and the federal government, and have been trying to make medicare fail for more than sixty years, since it was created in 1962.
Private clinics that exist try to upsell (eg, in lens replacement), but can make ends meet on the standard fees.
Eolirin
NY State’s medicaid buy-in program doesn’t quite work like that. You need a disability determination, and then you’re allowed to keep Medicaid, up to something around 68k in earnings, and I believe you can have it in addition to private insurance, and it can cover the premium costs from that private insurer.
Something like this is a viable path forward for a state, if applied to everyone I think. A way to spend state money to subsidize the gaps provided by the current systems; would be nice if it applied to co-pays too. It runs afoul of the same problems that any state driven solution would though, which is that in a recession there’s no money for programs right as their usage spikes. And it doesn’t make a ton of sense to do this as a federal program, except maybe as a way of bringing employer provided health care costs in line with marketplace subsidies. But there are probably better less moral hazard inducing ways to do that.
Eolirin
@Ohio Mom: I have a similar experience with a managed medicaid provider, so private, in NY. And it’s a little easier to get providers because the reimbursement rate is a little better for them.
Still pretty much frictionless though, as long as it’s for stuff they’ll cover. Private providers aren’t necessarily difficult to deal with with medicaid. And for the disability community, effectively no copays is a huge deal. Costs for ongoing care, even with decent private insurance can be devastating just on the copays.
Aardvark Cheeselog
The problem that most people’s thinking about these issues has not been very well-informed by the events of the last 10 years (Oh hi! O’Care’s 10th anniversary!) and consequently people are convinced that there’s lots of money going to buy blow for insurance execs, and hookers’ backs to snort it off of.
People who realize that the turnips which still have some blood to be squeezed are looking at doctors and hospitals, but they are a tiny fraction of the public.
Matt McIrvin
@davecb:
I was just talking about this in a US context: I think one of the main reasons Paxlovid is so under-prescribed is that it needs to be started within 5 days of positive test or the onset of symptoms, and because of all the delays involved in non-emergency care, the patient often needs to decide to start pursuing that almost immediately upon realizing they have COVID, before it’s even clear that their case might get serious. If you decide to wait and see whether it’s bad, you’re forfeiting Paxlovid entirely because it will be too late by the time you get it.
Matt McIrvin
@Jesse: Rudolf Steiner’s Anthroposophy (the movement behind the Waldorf schools) seems to be quite big there–I remember getting an earful about it from a guy on a German train, really freaked out my traveling companion. Their approach to medicine is basically homeopathy under another name. Waldorf schools were a center of lefty American antivaxxerism in the pre-Trump era.
Ruckus
@itstrue:
They’re really just a bunch of powerful pigs at the trough.
That’s how we do it here. In those “socialist” countries they set the prices for everything. Here we allow the wealthiest segment to set prices thereby insuring that the lowest end of the market gets doodly squat. Capitalism has good points, but so does most every form of economy/political life. But like all the rest of them it can be massively abused and it is here in the good ole USofA. We need a rational, proper tax system, one that creates a far better equality than we have now, one that accepts that not everyone is going to be a gizillonaire and that most gizillonaires are actually worthless pieces of shit. Taxes and healthcare and even government are 3 things that really do not work well under unfettered capitalism.
Hob
@Matt McIrvin: Homeopathy itself comes from Germany, and it stayed pretty popular in Europe throughout the 20th century, whereas in the US it fell out of fashion until a comeback in the ’70s.