Back to Basics

As I initially read and took notes throughout this section I really didn’t grasp the absurdity of the program.  When I started writing this column I was overwhelmed by the stupidity of the thought that someone would actually think this was health care reform and not just a government take over of the health industry.  The public option is based on the same business model (if you could actually call it that) of the Medicare system – the system that is currently failing and going bankrupt today!  So why would one think that applying the same standards of a failing business to another model is going to create success.  Did any of the members participating in the creation of this bill have any business background?  Failure x 2 does not equal success.  With that said, I will continue on my quest at reporting on bill H.R. 3200.

The Public Health option is the portion of the bill allowing the government to sell insurance.  The Public Option is basically a Medicare type program offered to those who do not quality for Medicare, operating concurrently and competing against the private plans offered in the Health Insurance Exchange.  The government controls the Health Insurance Exchange, controls the policies offered within the exchange, and would now be able to sell government policies.  Try side stepping this all you want, but this is a government take over of health care.

Some of the bill’s BS (sorry) just could not be reworded or interpreted, so I had to quote the bill so you could fully understand the vague references and enthusiastic goals of the Public Option.

The Magic Wand of Health Care

The bill establishes the administration of a Public Health Insurance Option, an exchange qualified plan, which is supposed to “ensure choice, competition and stability of affordable, high quality coverage.”  The Secretary of Health & Human Services is responsible to create a “low-cost plan without compromising quality or access to care.”  WOW!  Apparently the magic formula has been discovered to have low-cost insurance premiums that will give accessible and quality care, and if you listen to Obama’s promises, this will not raise taxes.  Since this is similar to Medicare, one would have to wonder why this magic wand hasn’t already been applied to Medicare to ensure the same quality of care without bankrupting the system.

The Public Option will only be made available through the Health Insurance Exchange, so if you cannot obtain insurance through the exchange for whatever reason, you will also not be able to obtain the Public Option insurance either.  (For further information, please visit article H.R. 3200 – The Health Insurance Exchange.)

The Public Option must comply with the requirements that apply to an exchange plan, including benefits, benefit levels, provider networks, notices, consumer protections and cost-sharing.  Different levels of plans will also be offered.  The Secretary enters into the contracts for the public option.  This is similar to that of the Commissioner on the Health Insurance Exchange.

The Secretary sets the premiums for the public option and may allow for geographic adjustments.  The rates must be set at a level sufficient to fully finance the cost of the health benefits provided by the public options and all administrative costs related to operating the public option.

The Secretary will determine the payment rates for services and providers based on similar services and providers under Parts A and B of Medicare.  Since this public option includes services typically not provided under Medicare (such as well-child visits) the Secretary has the ability to modify payment rates to accommodate these services.  The same goes for prescription drugs not typically covered under Medicare Part A or B.

An incentive is offered to get providers to participate, allowing rates 5% greater for the first three years.  Anyone on Medicare knows how difficult it is to find a doctor that will accept patients under Medicare – they just don’t want to get involved with the government program.  So to try to get doctors to even participate in this new Public Option plan, they will allow them to charge more for services just to get them to sign up.  The catch – but only if they participate in both Medicare and the Public Option.  Pediatricians and other practitioners who typically do not participate in Medicare would also be eligible for increased payment rates.

Beginning in the fourth year the Secretary will continue to use an administrative process to set the rates to ensure access to providers, promote affordability and the efficient delivery of medical care, but not increase overall medical costs.  Again, that magic wand formula that hasn’t worked for Medicare will be applied here.

Any medical providers currently under Medicare will become part of the Public Option unless they opt out.  Preferred physicians in the public option plan must agree to accept the payment rate without regard to cost-sharing as the full payment.  Providers excluded from participation in a Federal health care program of the Social Security Act will also be excluded from the Public Option.

There shall be no administrative or judicial review of a payment rate or methodology established for this section.  Since I am not a lawyer I can’t interpret this, but not allowing a review seems like a problem waiting to happen.  One of the major problems in health care today is the medical providers and insurance billing practices and we are going to expand this problem into the public option by not allowing for a review.  How does this reduce medical costs?

The Secretary may utilize “innovative payment mechanisms and policies to determine payment for items and services, including patient-center medical home and other care management payments, accountable care organizations, value-based purchasing, bundling of services, differential payment rates, performance or utilization based payments, partial capitation, and direct contracting with providers.”  Non-uniformity is permitted; the Secretary can vary payments based on different payment structure models for different geographic areas.  So, if I understand this correctly, if you purchase insurance through the Health Insurance Exchange through a private option you will be subject to the regular insurance billing and payment policies.  But if you have a policy under the public option, the Secretary can be creative in determining how payments can be reduced or increased, including contracting with the provider directly and bypassing the entire system.  Does this not create a “you have to play by these rules, but I get to play by a different set of rules” scenario?

These innovative payment mechanisms only further cause confusion to a billing system already screwed up.  You get caught up now in the billing maze just trying to find out what services cost and what your financial responsibility will be.  This extends the maze, allowing for creativity in bill practices.  No wonder so many claims are denied and payments take forever!

An account will be set up in the Treasury for receipt and disbursements covering the operation of the public option.  Start up funds will be necessary, with the initial funding of $2 billion, PLUS additional funds from the treasury will be appropriated to cover 90 days worth of claims on projected enrollment.  Our taxpayer dollars at work.  Keep in mind this is only the Public Option.  The majority of the Exchange startup costs were defined in the Health Insurance Exchange part of the bill.

The additional office of the Ombudsman for the Public Option is established, with duties similar to those of the Medicare Beneficiary Ombudsman.  Without looking at the Medicare laws I don’t know how this differs in relation to the responsibilities of the Health Insurance Exchange Ombudsman.  But now we have not one, but three Ombudsman positions just to take care of health care!

Remember, the majority of the Health Insurance Exchange is established under the private option section, which the public option will also be part of.  So the government has created one option (public option) to sell insurance under another government agency (Health Insurance Exchange), which will also broker insurance policies offered under the private option, also controlled by the government.  Expanded government and government control.  How does all of this get covered without raising taxes while keeping insurance affordable?

Under this Public Option, medical providers, which are reluctant to participate under Medicare, are going to flock to this new government run Public Option.  As a benefit for joining this plan they will have their rates set by the government, based on the same rates as Medicare.  Since these rates are obviously set low, as most medical providers resist taking on Medicare patients, you could say they would be underpaid for services.  Since they also need to cover overhead and administrative costs, they will have to recoup these costs elsewhere in order to stay in business.  Does that indicate their services under other plans would then have to be negotiated at higher rates to compensate for the low government rates?  Is this not part of the problem that has helped create this medical disaster in the first place?  Without the ability of free enterprise you really don’t have competition to establish pricing standards and you certainly take away the initiative to participate in a field in which the government sets all of your fees.  If this pricing scheme has worked so well for Medicare, and Medicare is going broke, why would the same application in another government medical program not produce the same results as Medicare?

I guess they are applying the saying, “if at first you don’t succeed, try, try again.”  The bottom line – this is the same old government program, given a new title and spin, expanded to serve a new demographic.  Government costs, government control, government history of failure.