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Stark Seeks Government Insurance Option in Health Care Overhaul

By Alex Wayne, CQ Staff

DECEMBER 17, 2008 -- Rep. Pete Stark, D-Calif., who chairs a subcommittee that will be influential in efforts to overhaul the health care system, said Wednesday that any plan must include a new government-run health insurance option, modeled on Medicare, that would compete with private insurers.

He also said that he does not expect Congress to pass a health care overhaul until late in 2009 or perhaps 2010. That was a pointed contrast with some Senate Democrats--notably Finance Chairman Max Baucus, D-Mont.--pressing to pass a health overhaul within the first few months of the Obama administration.

Stark, chairman of the Ways and Means Health Subcommittee, is one of the most liberal members of the House. He has long supported expansion of Medicare to cover every American, so it comes as little surprise that he would endorse a twist on that approach as part of a health care overhaul. His call is almost sure to draw strong opposition from private insurance companies.

But Stark evinced no concern about that threat Wednesday.

"We're not going to have the insurance companies on board, but they're the easiest ones to roll because nobody likes insurance companies," he said in a conference call with reporters. Stark is a longtime critic of the insurance industry.

America's Health Insurance Plans, the industry's trade association, recently announced that if Congress passes a law next year requiring every American to purchase health insurance, its members would agree to sell policies to everyone and would stop excluding from coverage people who are in poor health or who have histories of medical problems.

"Health care reform should build on what's working in the current health care system and allow patients to continue to benefit from health plans' innovative care coordination and disease-management programs," said Robert Zirkelbach, a spokesman for AHIP. "We are committed to health-care reform and look forward to working with policymakers to achieve the shared goal of universal, affordable coverage."

President-elect Barack Obama has made a systemic health care overhaul a top priority; he wants to expand insurance coverage to all or nearly all Americans while reducing the spiraling costs of care. Former Sen. Tom Daschle, D-S.D., Obama's nominee to lead both the Department of Health and Human Services and the health care overhaul effort, has proposed a plan that would include opening the Federal Employees Health Benefits program to all Americans.

Crowding Out Private Insurers?

But that differs from what Stark endorsed on Wednesday. The FEHB provides a range of private insurance coverage options to government employees, including members of Congress. It does not include a government-run insurance plan.

Stark's conference call was organized by the Campaign for America's Future, a liberal interest group. Stark was joined on the call by Jacob Thacker, a University of California professor who released a report Wednesday laying out what he says are the benefits of a public insurance option in a health care overhaul.

"The core argument is that public insurance has distinct strengths and thus, offered as a choice on a level playing field with private plans, can serve as an important benchmark for private insurance within a reformed health care framework," Hacker wrote. Medicare, he said, has proven better than private insurance plans at controlling health care costs and "has pioneered new payment and quality-improvement methods that have frequently set the standard for private plans."

Hacker and Stark said they don't intend for a public insurance plan to replace private insurance entirely, but Stark conceded that might be the result if such a plan were enacted.

"I don't know that it would destroy private insurance," he said. "I do suspect that if we eliminated selection and had to have universal coverage at community rating, as I suspect any plan would have, that the larger plans would basically become intermediaries," or contractors within the public insurance plan.

Stark's timetable for a health overhaul might put him at odds with his colleagues in the Senate. Both Baucus and Sen. Edward M. Kennedy, D-Mass., the chairman of the Senate Finance and Health, Education, Labor and Pensions Committee, plan to introduce comprehensive health reform bills early next year and want to move on them quickly, perhaps within the first 100 days of Obama's presidency.

But Stark said he does not believe an overhaul can pass that rapidly. He said Congress has "deferred maintenance" to address first, including an expansion of the Children's Health Insurance Program (SCHIP) that was vetoed by President Bush in 2007. And he said lawmakers should wait until Obama is inaugurated and can officially engage in the health care debate as president.

"I think it's imperative that we wait for the new administration," he said. He said he thinks it will take about a year for each chamber to coalesce around its own health reform plan.

"I like the idea of voting on them no later than the very early part of 2010," he said. "I would think it'll take a full year."

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