By Jane Norman, CQ HealthBeat Associate Editor
April 27, 2009 -- Mandating a public plan as part of the health care overhaul will create a "nuclear minefield" that will destroy the collegiality that so far has marked this year's debate, a public plan opponent warned at a forum Monday.
Stuart Butler, vice president of domestic and economic policy studies at the conservative Heritage Foundation, said at a lunchtime forum organized by the Alliance for Health Care Reform and The Commonwealth Fund that traditional foes and allies have continued in polite conversation about the massive policy changes under consideration.
"I must say this time around, compared with a lot of previous periods, particularly during the Clinton administration, this has been a remarkably positive and collegial process of trying to figure out how to do this with the strong commitment of people across the spectrum," said Butler.
Butler said the inclusion of a government-sponsored plan would change the dynamics. "I really do believe it will break up the coalition that would otherwise achieve real change in this country," he said.
However, John Holahan, director of the Health Policy Research Institute at the Urban Institute, said the rate of growth in health care spending must be reduced and much of the problem is caused by concentration in insurance and hospital markets. He said "it's hard to see the alternative" to a public plan, though he also said the savings in administrative costs with its inclusion may be overstated.
Karen Davis, president of The Commonwealth Fund, said affordable coverage for all Americans could come through a new national insurance exchange that would offer private plans as well as a new public health insurance plan with easy enrollment, plan comparison for consumers, and reduced administrative costs. The new model could be built on employer coverage and public programs, she said, with everyone required to have coverage coupled with assistance for the poor.
Finance Committee Chairman Max Baucus, D-Mont., included a government-run insurance plan as part of his initial "white paper" proposal in November, but Republicans have been resistant, including Sen. Charles E. Grassley of Iowa, the top Republican on the committee. Baucus said Apr. 24 that a government plan is still on the table but he would rather focus first on preserving the insurance system for self-insured companies while also expanding private insurance and public programs such as Medicaid for low-income Americans.
Baucus and Grassley are set to do a walkthrough of policy options on Wednesday with committee members as they prepare for a markup of legislation by June.
More doubts about public plans were raised by Karen Ignagni, president and CEO of America's Health Insurance Plans. Ignagni displayed unpublished data she said her organization has gathered on private-plan performance in California. The analysis showed double-digit percentage reductions in 2005 and 2006 in emergency room visits, re-admissions, office visits, and hospital days for Medicare beneficiaries enrolled in Medicare Advantage plans, the managed care alternatives to traditional fee-for-service Medicare.
"No one in our community is advocating the status quo," said Ignagni, though she said, "I think there would be very little left of a private market" if a government-sponsored plan is written into law.
Watch a webcast on the public insurance option.