The Snowe Trigger - A catch-22 to kill the public health insurance option
Posted on September 23rd, 2009 by Jason Rosenbaum in Profits Before People
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Olympia Snowe's trigger is a plan to kill the public health insurance option. Not kill it as in make it weaker, but kill it as in make absolutely sure it will never, ever come into existence.
Senator Snowe's trigger is literally a catch-22, defined by Wikipedia as "a set of rules, regulations, procedures, or situations which present the illusion of choice while preventing any real choice."
The legislative language says that a public option will be set up in a state in which health care is not affordable to 95% of the state's residents, but it defines affordability as after the new tax credits that are written into the bill to make health care affordable.
Let's break that down.
In Snowe's trigger amendment, if affordable coverage is not available for 95% of a state's residents, then you get a public option in that state. While there are issues with state-based public health insurance options, the catch-22 comes with Snowe's definition of affordability.
Affordable is defined as 13% of income. So, if there is no plan in the exchange that costs less than 13% of a person's income, we'd get a public health insurance option. But that calculation of what a plan costs is made after the government pays out subsidies or employers pay their share. And therein lies the catch-22.
Max Baucus's bill caps out-of-pocket costs for people buying insurance in the exchange at 12% of their income (if they purchase the silver plan in Baucus's four plan levels - bronze, silver, gold, and platinum). Therefore, after you add in government subsidies, you will always have access to a plan (or two, the bronze plan would presumably be cheaper than the silver plan) where costs will legally always have to be below 12%. The insurance industry can raise their rates as much as they want and government will make up the difference. The trigger, if passed, will never trigger. Not ever.
(This opinion has historical weight - there is a trigger for prescription drugs in Medicare Part D. So far, after 6 years, it still hasn't been triggered. Meanwhile, the pharmaceutical industry rakes in the profits and seniors get screwed - a Families USA report [pdf] showed that private drug prices were an average of 58% higher than prices the government could have obtained through a public option. The fact that this trigger was never triggered costs government and seniors hundreds of billions per year, money that goes straight into the pockets of private pharmaceutical companies.)
It's clear: No public health insurance option anywhere in the country will ever be created under Snowe's trigger amendment.
The trigger amendment isn't a fig leaf. It isn't even a co-op. It's a plan to kill the public health insurance option outright, and give taxpayer money straight to private insurance companies.
Why does Senator Snowe want to deny choice and competition to her constituents, something they want? Why would she rather bail out the private insurance companies?
In a poll conducted September 14th by Lake Research Partners of 400 likely voters in Maine (with a margin of error of 4.9%), a strong majority - 58% - favor the creation of a "a public health insurance option to compete with private insurance companies."
When asked if they favor or oppose "requiring everyone to buy and be covered by a private health insurance plan," 55% of Mainers are opposed. When asked if they favor or oppose "requiring everyone to buy and be covered by a health insurance plan, with a choice between a public option and private insurance plans," 55% favor.
If you ask Mainers if they should be required to buy private insurance, they're against it, but if you ask them if they should be required to buy insurance, with a choice of public or private, they're for it. The numbers exactly flip.
The poll numbers further comdemn Snowe's trigger. We asked people which statement below comes closer to their view:
- The public health insurance option should be a back-up; we should only offer it in case reforms to private health insurance companies don’t result in making health care affordable for most people.
- Because people are going to be required to buy health insurance, we need to offer the choice of an affordable public health insurance option to provide competition so that people aren’t at the mercy of private insurance companies.
By a 54% to 24% margin, Maine voters chose the 2nd statement.
It's clear the people of Maine understand that a trigger for a public health insurance option is not health care reform. They get the essential question: Will the private health insurance companies finally face competition, or will they keep their government-supported monopoly to continue screwing you over with skyrocketing rates and serial denial of care, subsidized with your taxpayer dollars.
94% of insurance markets in this country are not competitive. This has led to rising costs that squeeze families and business as the insurance companies rake in the profits. As Senator Chuck Schumer said, "Any reasonable criteria for triggering a public plan has already been met."
The private insurance market has failed, and we've given them enough second chances. The American people support a public health insurance option that's available on day one, not a bailout of the insurance industry. President Obama has said that a public health insurance option is his first choice to lower costs and increase competition. Senator Snowe should not stand in the way of the people of Maine or the rest of us for the sake of the insurance companies.
Thanks for the insight. We (The Roosevelt Institute Campus Network) are actually trying to get a lot more college students involved in the debate and in the policy making itself, rather than rooting for a particular side from the sidelines; especially considering that the outcome of this debate is going to have far-reaching consequences for our generation.
Featured in our "10 Ideas Series," a few of our members have come up with ideas ranging from Using Old TV Bandwidth (created after the switch to digital tv) to Expand Rural Telehealth, to Using Municipal Identification Cards As Gateways to Health Services for Immigrants and the Uninsured.
Check us out when you get a chance at http://www.rooseveltcampusnetwork.org/
We're hosting a Midwest Policy Workshop in Detroit from Nov. 13-14, so it will be a good way for students to learn how to get involved in policy making and shape the debate
Here are some more thoughts on the overall picture
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If you think the insurance companies are going to lower their cost while having a monopoly over the process – well I’ve got a bridge to sell you …and I think Wall Street should be completely unregulated – I trust strangers with my money…and pollution is good and we should take all of the air bags out of the cars….
When industry has an iron lock grip on distribution and the markets – the government is driven by the people to take corrective action create competition and safe guard the markets and its assets through the rule of law. It’s our saving grace. Our market systems depend and only will thrive on competition; unregulated markets are a roller coaster ride of boom, bubble and burst.
Individual businesses operate at a cross hair as to what is good for the markets and its assets and resources – those resources are not only minerals, timber, coal and oil but you and I and the air we breathe. Individual businesses want to eliminate all competition in order to maximize their profits – from the guy that runs Kinko’s – who worries about Copy Connection opening up down the street to Microsoft out maneuvering Firefox to be the only player in the operating system market, to AT&T wanting to be the only Phone Company, or Cable wanting to shut out Satellite from operating in your neighborhood.
The winner takes all mentality doesn’t take into account the whole system. Each sector of the economy impacts each other. It needs to be maintained through the rule of law in balance to operate at its most efficient. That’s what governments do and what government is for. The pure free market system is a myth. It doesn’t exist and as an economic model is pure anarchy.
Unfortunately a bill of goods has been sold to a section of the public – so much so they are willing not to vote their pocket book but emotionally respond to buzz words and fear mongering and to protest against their own self interest.
The media is a powerful tool well underestimated by the millions sitting on their sofas watching it passively every night. But well understood by those who want to shape public opinion – not for the public's own good but for their own profit and powerful self interest.
As we are forced to re-regulate the markets because of the enormous damage done to our economy by the unregulated markets, foreclosures, unemployment and stagnating wages, and as we are forced to roll back the enormous take of the middle men who run the insurance sector, and as we are forced to wean ourselves off oil and dirty energy sources that are crippling our economy by holding back innovation, invention and the clean energy job sector – we are going to hear all kinds of horrible things about those elected leaders pragmatic enough and smart enough to know that change is necessary.
We are going to hear horrible lies, distortions of truth and promotion of violence as the status quo looses part of its grip.
The bellyaching coming from their media outlets is going to be enormous.
But at the end of the day if you vote your own pocket book and don’t care what happens to the millionaire strangers trying to pull the strings in Congress, and don’t take up their causes as if they were your own, and keep your eye focused on what is best for you and your family – then the Country will be fine.
There is nothing dirty or evil about the words “Public” or “Option” – in fact those words are what make this Country go!