Let me open by again noting this is not The Entirety. In fact in a lot of ways the important thing of Division A is the exchange and the rules surrounding it. The Public Option is going to have a lot of potential problems, not least the risk it will be the dumping place for other plans, picking up the significantly more at risk and so having significantly higher costs. There’s no real mechanism to control this at this time – no risk aversion control. OK, let’s get into the nuts and bolts.
Let’s see. The plan has to offer Basic, Enhanced, and Premium options, and MAY offer Premium plus. It has to abide by all rules (including actuarial determination of premiums and cost-sharing) of other exchange participants, but can only be offered as an exchange option.
The Treasury will make $2 Trillion available for startup moneys – administration and any payouts until sufficient premiums are collected into the trust fund to cover it all. The plan administration will repay the money plus interest over ten years out of moneys collected (premiums, penalties, specific tax collections, etc.) And a fun clause pops in here: No TARP equivalent bailouts. Bluntly, that’s a feel-good clause. A panicked vote on a perceived emergency can have a “except for this once” clause written — just as TARP had.
SecHHS is allowed to negotiate provider and drug costs but has some restrictive bounds. No lower than what’s negotiated for Medicare and Medicaid, and no higher than the average of what’s paid by the other QHBPs of the exchange. Note the pressure this will put on cost control, but at the same time this plan will probably pay medical providers more than medicare pays (which in turn tends to pay more than medicaid).
Also note: costs and premiums and such CAN VARY by geographical region (ie it’s not tied to state borders). That’s basically the clause that allows cost of living supplements to apply to major metropolitan areas instead of state-wide application.
The next interesting clause is the provider network. If the provider accepts Medicare they are automatically accept Public Option UNLESS they opt out. If they opt out they also automatically opt out of Medicare and then have to apply for a Medicare Only exception. Other than the paperwork hassle, no penalties exist. Providers can start the opt-out up to a year before the public option goes into effect, and can opt back in at the time of annual enrollment.
There are several clauses listing what providers can be accepted which can be simplified as pretty much the same rules as for Medicare, but with prices/costs as negotiated for Public Option. Note again that these are likely to be MORE THAN what Medicare pays.
A specific clause that points out enrollment in the public option is VOLUNTARY. Another that says members of congress may enroll (instead of using their gold-plated but more expensive program). Finally, this plan will work out a reimbursement arrangement with VA similar to those made between VA and private health insurance plans.
That’s it for the public option. Easy, wasn’t it? Next up: Affordability Credits aka low income subsidies.