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Snowe Amendment Would Add "Triggered" Public Option to Baucus Bill


Sen. Olympia Snowe (R-ME)

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The Senate Finance Committee has released a comprehensive list of proposed amendments to chairman Max Baucus' health care reform draft. You can read it here. There's a ton of interesting stuff in there, including measures that would expand subsidies and create a robust public option. But there's also this one, from Sen. Olympia Snowe (R-ME):

This amendment establishes a non-profit government corporation through which a ―safety net‖ plan would be provided in any state in which affordable coverage was not available in the Exchange to at least 95% of state residents. An individual would be deemed to have affordable access if either of two conditions is met. First, two or more plans are offered with premiums - the cost of which does not exceed a specified percentage of the individual's adjusted gross income (AGI), after deducting any available tax credit or employer subsidy from the cost of such premium. The percentage contribution shall range from 3 percent of AGI at 133 percent of the Federal Poverty Level, to 13 percent at 300 percent and above.

This is the same triggered public option proposal she's been floating all along, and it's not one that will appease most progressives. Hearings on the legislation begin tomorrow, and the vote on this amendment will be one of the most widely noted. If it passes, then when Senate Majority Leader Harry Reid merges the Finance Committee bill with the HELP Committee bill, he'll have to choose between the two. And that's when the fight over the public option will really heat up.

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39 comments

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September 21, 2009 10:17 AM   

This isn't ideal, but frankly the fact that she intends on proposing the amendment is without a doubt a good sign.

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September 21, 2009 10:28 AM    in reply to holyhandgrenaid

I agree. Baucuscare didn't originally have any kind of public option at all. So Olympia Snowe is in effect proposing to amend the bill to make it more liberal.

Yes, triggers don't work and can be gummed up and so on. But it's a good sign that Olympia Snowe is feeling pressure to at least give the appearance of working in good faith.

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September 21, 2009 11:53 AM    in reply to Xantar

Yeah, I'm with you guys; Snowe's last few days have been a hard run left. Between this and saying her support depends on increased subsidies, it's enough to make me wonder whether she's about to pull a Specter...

This would be a heck of a way to go about it; she'd certainly get more respect/gratuity from progressives than Arlen did with his ham-fisted "which side am I on again?" routine.

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Tim

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September 21, 2009 8:39 PM    in reply to hunter

Coming in on this late (I'm in Korea). What if, instead of eliminating the trigger mechanism, we manipulate it to the point that it is almost certain that it will kick in? I mean a very liberal trigger mechanism? At that point, Snowe would probably have to still vote with it as it. Also, when it becomes apparent that the bill will pass, lots of Republicans will jump on board. The trigger is cover for the lot of them, I'm guessing.

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September 21, 2009 10:37 AM   

What's the appeal of a trigger? Is it just supposed to appease those who believe in magic market faeries? Or is it some sort of way of pretending to do something while leaving the insurance industry to run rampant.

It seems like there's really no way to design a trigger that wouldn't trigger immediately given how screwed up our system is now, or alternatively wouldn't ever trigger if it's built by those who like the current system.

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September 21, 2009 11:08 AM    in reply to libdevil

i think from snowe's point of view, the trigger is a way of evaluating health insurance markets and the 'need' for making a public option available on a state-by-state basis. that states that have healthy, competitive markets (with affordable/adequate insurance plans available to consumers) don't 'need' a competing public option. but states that don't have a 'healthy' functioning health insurance market might well 'need' the option of a public plan.

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Tim

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September 21, 2009 8:59 PM    in reply to fkaZk0sm0

Just to indicate how much we over pay for insurance. I work for a University in Korea.

Yesterday, I went through and translated my pay stub for the first time in 2 years.

I pay 46,000won a month for insurance.

In the last three years that has varied from $48 to as little as $30, depending upon the currency exchange rate.

I pay half. My employer pays half. So the total cost is double my contribution. I'm single.

Now probably, the system is underfunded, but not to an order of magnitude.

(I believe the system they have hear is similar to, if not the same as, Japan's which you can read about else where - also similar to Taiwan's the most efficient and most recently created system).

Think about that.

Imagine what would happen if tomorrow you woke up, and your insurance premiums were costing you in the range of only $50 a month (or if self employed, $100 a month).

Imagine what would happen to our anemic economy if we could change the system tomorrow.

Kind of shocking the size of the scam of American health insurance. Shocking.

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September 21, 2009 2:51 PM    in reply to libdevil

The appeal of the trigger is that it puts to the test only objection to large scale public provision of health insurance. The other side says the private market, given the freedom to do it;s thing, offers a better solution. Many people are already convinced this is false. But many others are not. that's why we are where we are.

The trigger puts this proposition to the test. (The key is in setting firm criteria for the trigger--I don't think objectively there is any one way to do it.)

If the private market provides affordable, quality insurance for everyone then we all win, if it does not then the argument is settled.

It seems to me this is an ingenious way of changing the frame of the debate: from having to prove government can provide a service efficiently, which is very very easy to demagogue successfully, to forcing the private market to prove it can provide a service which it too seldomly does.

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September 21, 2009 10:49 AM   

This is better than just not having anything.

This also keeps the political viability of the public option. It keeps it a "legitimate and mainstream" idea. Heck, a GOP even proposed it, right.

Whether the trigger is likely to occur or not, my hope is that we can get a vote just on a public option bill down the road, once this mega HCR bill is done. The flaws in this current bill will mean we will still need to ratchet down costs in a few years. The PO is still the best way to do it.


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September 21, 2009 11:16 AM    in reply to AnswerFrog

It's not better than nothing because it basically is nothing.

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September 21, 2009 1:51 PM    in reply to DA in LA

If you had read what I said instead of a kneejerk non-answer to it, this is in fact better than nothing because instead of the story being "public option thrown in garbarge as stupid lefty idea" it is some weasely 'compromise' (which Congress will no doubt flake out on) which keeps the idea of a PO alive. In fact, the machinary of a PO will be written into this bill. This makes it easier for us to push it as separate legislation down the road when Baucus' ideas fail to adequately reign in spending. And then, instead of a 1000 page HCR overhaul, it will simply be an add-on to the existing health exchange system.

Ideal? No. Better than nothing? Absolutely.

Triggers suck and don't work. But this is better than simply discarding the PO. We'll need to challenge some of these blue dogs to get a bluer Congress, not just more dems, but better dems, but then we will be able to get a separate bill passed.

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September 21, 2009 10:55 AM   

It seems like there's really no way to design a trigger that wouldn't trigger immediately given how screwed up our system is now, or alternatively wouldn't ever trigger if it's built by those who like the current system.

Bingo.

There are a couple of really political curiousities about the situation as it is now, however.

As between a Finance bill with toothless co-ops and a bill with a triggered public option (with or without toothless co-ops), the latter would be more liberal. And it would be Snowe, nominally a Republican, making a bill written by a guy who's nominally a Democrat, it more liberal, especially given that she's advocating more generous subsidies. Stuff like that was common in the 1960s, but today, It makes my head ache to just tocontemplate it.

Second, when leadership starts blending the Finance and HELP bills, the difference between a bill with a public option and one with a triggered public option is a lot narrower than between bills with and without a public option.

Arguably, the middle ground between a public option and no public option is a triggered public option. However, the middle ground between a public option and a triggered public option--whatever it turns out to be--is a hell of a lot more likely to be something progressives can stomach, if only grudgingly while holding their noses.

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September 21, 2009 1:11 PM    in reply to The Commenter Formerly Known as NCSteve

Instead of a trigger based on high prices we should have a trigger based on competition, so that the PO only enters in those markets where the market is dominated by 1 or 2 big insurance companies. Set the trigger so that the PO only enters markets where there are insurance companies with greater than 33% market share and then you can sell the public option as a way to provide an option when thee private competition is failing to provide true competition to the market leader.

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September 21, 2009 2:41 PM    in reply to nerox3

But the objective is affordable insurance, not a multiplicity of firms offering insurance that is too expensive. If a single entity insures the entire population and it does so for a post-subsidy price that is affordable for everyone that is the whole point, is it not?

That said, the bigger point is defining the market to which the trigger applies. I don't get why it should be done on a state by state basis. That would seem to disadvantage small, sparsely populated states... like Maine. I realize there is a insurance regulation infrastructure already existing at state levels, but the principle of competition, especially in health care argues for creating as large risk pools as possible. Plus the Federal regulations already in the bill are superceding state laws anyway.

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September 21, 2009 11:26 AM   

For Mr. Baucus, the challenge will be to stop his fellow Democrats — they outnumber Republicans 13 to 10 — from shifting the bill so hard to the left that they chase away Ms. Snowe, who could provide the crucial 60th vote needed to get the measure through the Senate.

Consider Ms. Snowe’s most important amendment: to trigger the creation of a government-sponsored insurance plan in any state that fails to provide affordable insurance to 95 percent of residents. Mr. Baucus will have to fend off powerful Democrats, including Senators John D. Rockefeller IV of West Virginia and Charles E. Schumer of New York, who want to create the public plan from the outset.

http://www.nytimes.com/2009/09/21/health/policy/21prescriptions.html?_r=2

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September 21, 2009 11:30 AM    in reply to Indie Pro

and look at this line again:

to trigger the creation of a government-sponsored insurance plan in any state that fails to provide affordable insurance to 95 percent of residents.

so the Snowe triggered public option will be weak, since it is only created in certain states. It isn't national.

This is another giveaway to the industry. Limit the public option to only certain states. That's the trigger she is proposing.

The trigger is for a near dead public option.

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September 21, 2009 2:27 PM    in reply to Indie Pro

The irony here is that it would most likely be triggered in states that would vote against the public option (AL,MS,SC,LA,etc.) and not likely be triggered in states that would vote for it (MA,CA,NY,etc.)

This fact alone might generate enough outrage on both sides to kill the trigger option.

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September 21, 2009 3:02 PM    in reply to Indie Pro

The why wouldn't Rockefeller and Schumer propose a stronger set of conditions instead of poking her in the eye?

By proposing the amendment she is saying that she accepts the principle of a public option. (why do some people have so much trouble recognizing that is a victory) But she wants the private sector to have a chance to serve the market adequately first. So what is her objection to a stronger set of criteria? Make her defend why insurance needs to be done on a state by state basis. Make her defend 95%, etc...

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September 21, 2009 3:30 PM    in reply to Economides

Agreed. Counter with a set of measures which would almost guarantee the trigger in every state would get tripped.

Then she can save face with a "market" and "competition" approach, and the public option gets fully ingrained into the bill, so when merging of bills on the Senate side occurs, Agreed. Counter with a set of measures which would almost guarantee the trigger in every state would get tripped.

Then she can save face with a "market" and "competition" language she can use as cover. This way the public option gets fully ingrained into the bill, so when merging of bills on the Senate side occurs, Snowe, Nelson, etc. can all have cover to vote for the merged bill, and then the filibuster hurdle is cleared and the up or down can occur. Then to conference where the bill can be moved further left., Nelson, etc. can all have cover to vote for the emerged bill, and then it goes to conference and the filibuster hurdle is cleared.

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AJM

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September 21, 2009 2:31 PM    in reply to Indie Pro

Do you think that Sen. Snowe can be re-elected if she kills HCR? Especially given that her state supports true public option?

Sen. Snowe -- I've always been a Republican since I registered -- needs to rethink her position. She stated the reasons she joined that party and then stated that the party had moved away from her. One of the reasons stated was fiscal responsibility. Those reasons may cut in a different direction now. Isn't it true that all of the recent Democratic Administrations have been more fiscally responsible than all of the recent Republican ones? Is she going to follow those who talk thetalk, or is she going to follow those who walk the walk?

Remaining with a party because of who they used to be doesn't make much sense.

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September 21, 2009 11:26 AM   

I don't want her to support the Baucus bill. I prefer reconciliation.

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September 21, 2009 11:29 AM   

I don't think a trigger is anywhere near as good as the real thing, but if the trigger were national so that the public option could be as big as the insurance companies are, and if it gave the insurance companies until whenever the bill comes into effect to get their acts together, then maybe it can be lived with. When the trigger is pulled, the bullet that comes out must be a national public option, not something so small the private companies can eat it for lunch. And it has to be very definitive about what it takes to pull the trigger so that the insurance companies can't keep it locked up in court, maybe a provision that if it is challenged in court, it will be in force until ordered otherwise by a definitive court ruling.

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September 21, 2009 11:30 AM   

My problem with a trigger is that when you set some metrics for the Health Care Industry to hit and a certain amount of time to hit them they will simply focus their top lawyers and analysts on the case and figure out how they can game the system. Something like this is always going to be somewhat subjective in evaluating and therefore since we know that the Health Care Industry is failing us miserably, on purpose I might add; we should just go ahead and pull the trigger now.

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September 21, 2009 3:10 PM    in reply to JohnAH

"My problem with a trigger is that when you set some metrics for the Health Care Industry to hit and a certain amount of time to hit them they will simply focus their top lawyers and analysts on the case and figure out how they can game the system."

1. I am confused about whether you consider the health insurance industry part of the health care industry. I gues I could ask the same for car insurance and the car industry and home construction and flood insurance industry.

2. If you insist on being so cynical, then explain why doctors and hospitals won't do the exact same thing to "The Public Option" the way they have done so to mMedicare.

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September 21, 2009 11:33 AM   

Trigger or no trigger, that is the question.

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September 21, 2009 11:37 AM   

A trigger is a joke, scam, and an insult!!!

Just as good as nothing!

No mandates without an active, real public option!

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September 21, 2009 11:41 AM   

I actually like this amendment for a few reasons:

1. It maintains the power of the states within the union -- and it doesn't impinge on states who already have efficient health care systems, i.e. Minnesota or Wisconsin,

2. It's being proposed by the "opposition", meaning that if it is included in the bill, the bill has a likelier chance of going through, and

3. A triggered public option of 95% may not seem like a lot, but if it is based on AGI of the population of a given state, then you can bet it will be effective enough to have insurance companies get in step with the national desire for a more affordable health care system

Am I wrong?

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September 21, 2009 3:18 PM    in reply to SocialJustice

on #1.
The bill also sets federal regulations for the provision of all insurance on a national basis--no pre-existing conditions, no dropping coverage, no lifetime limits, etc...pre-empting state power.

Also, there is no reason why state boundaries are appropriate markers for insurance market boundaries. There are many places where commerce in general and provision of medical care, more specifically are regional. A person who lives in Portland Maine wouldn't think twice about coming down to Boston for a major medical procedure.

on #2 and #3: I generally agree. I think the question about what the appropriate share of those with access to affordable care should be much closer to 100%. For whom is it OK to have care be "unaffordable"?

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September 21, 2009 12:02 PM   

If I understand this right:

A trigger is a good thing if it gets triggered, right? I have every reason to believe it would be. Corporations are not built to think long term, they are only interested in tomorrow's profits. So they never choose the preventative steps over the immediately satisfying ones.

I'm thinking of several other examples. The music industry, which refused to budge on the CD format for years, despite the imminent dangers therein. Why? CD's were selling at Walmarts for 18 bucks!

Also, McCain's gas mileage bill on the early 2000's was dismissed with a "promise" from the car companies that they didn't need oversight, they would make the changes themselves. Obviously, that didn't happen, and they paid the long term price for it.

I think the Insurance companies will continue to price fix for as long as they can, and the trigger will have to be pulled. If so, it was a good thing...right?

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September 21, 2009 12:05 PM   

Wouldn't a company simply be able to offer a junk plan -- one sure to bankrupt anyone who needs it for costly care -- that slips in under the proposed percentage of AIG? I have a feeling INS CO lawyers won't have any trouble maintaining the status quo, and never triggering her proposal.

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September 21, 2009 12:17 PM    in reply to dick c

I'm pretty sure that the exchange will have standards that any plan offered in it will have to meet. So the answer to your question depends on the "standards" language.

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September 21, 2009 3:22 PM    in reply to KarenJG

If no plan can exclude you based on pre-existing condition or health, age, gender;no plan can drop you in the middle; no plan can impose arbitrary lifetime caps, then isn't everybody going to get something vastly better than the junk most folks get now?

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September 21, 2009 12:39 PM   

Snowe's trigger doesn't require 95% of a state's citizens to have coverage - only that coverage be "available to" 95%. Nor does it appear to require that the coverage actually covers anything, only that it be cheap.

Nor does it require that the resulting health care be affordable, only that the premiums are. Out of pocket costs can be as sky high as you like. Insurance companies will have no trouble offering a highly affordable premium on a $10,000 deductible plan and avoiding the trigger, even if not one individual is dumb enough to sign up for the plan.

Yes, the "standards" language might provide protections against these machinations. And the "standards" language, which no one is discussing out loud in any of the forums I read, may get shuffled around mightily as the last sausages are stuffed, and watered down further in the future corporate owned congresses sure to be foisted upon us once the Supreme Court writes out its permission slip for unlimited corporate campaign contributions. There's little reason to hope that a public option delayed will not be a public option denied.

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September 21, 2009 4:03 PM    in reply to nicteis

I'm going by "in any state in which affordable coverage was not available in the Exchange"

Granted, we don't know what the standards will end up being in order for a plan to be available through the exchange. But everything I've seen so far include things like no life-time caps and caps on co-payments. As far as I can tell, it's not talking about plans on the open market, just plans in the exchange.

Another thing, if her amendment is the proposal she was shopping around earlier, the evaluation of whether trigger conditions are met would happen before the exchange part of the bill takes effect. I don't know when that is, though, but, again, if it's the same proposal the public option would, in effect, be available from "day one," not some time down the road.

Don't take all this "explaining" on my part as an indication I support this. I'd prefer a robust public option available to everyone from day one. Snowe's proposal isn't great, and it isn't my preference, but it's not as bad as some people here are making it seem. Could it get worse? You betcha. But as it stands, it's better than some of the proposals out there.

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September 21, 2009 12:55 PM   

Full public Option on a national scale. I don't trust a single one of these cowards to do the right thing by the middle and lower income groups who will end up shouldering the burdens of the final bill's provisions and mandates.

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September 21, 2009 3:08 PM   

This seems like a brilliant way to ensure that tax payers in blue states have zero access to a public option while those same people are simultaneously paying to subsidize the tremendous lack of options one has in red state where zero steps are taken by the state to insure the people or allow for genuine competition.

We already know that states like Arkansas have 1 insurance provider available to the vast majority of their people. How will that system end under this Snowe Amendment - by allowing a public option, of course. Meanwhile, taxpayers in states like Oregon, where we have plenty of options yet 25% of the people have no insurance and many of them (even under these formulas) still won't be able to afford it, send our tax dollars off to give other states a public option. That's rather messed up!

The Federal Government should not be in the business of offering services to select states, especially when such selections, by design, reward the states who do the least amount of work policing corporations or encouraging competition.

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September 21, 2009 6:09 PM   

It can't pass without Democratic support. ANy two democrats vote against it and it fails.

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September 21, 2009 6:23 PM   

Largely "transcription" from Brian, with a throwaway line about it not being a trigger that progressives care for. Why would that be, Brian? Perhaps you could pick up the phone and call Rocky or one of the other progressive Senators (or more likely their healthcare staffer) and ask what they think about the proposal.

For reference:

http://voices.washingtonpost.com/ezra-klein/2009/09/olympia_snowes_trigger_amendme.html

John

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September 22, 2009 9:28 AM   

Forget the trigger. Just pass a bill with all the necessary elimination of reprehensible insurance industry practices--rescission, denial for pre-existing conditions, annual and lifetime caps on benefits, etc.--provide subsidies for low income individuals/families, and then let each state decide how it wants to organize its own insurance structure. States could select among single-payer, public option, regional co-ops, join the Federal employees exchange available to Congress, or do nothing.

Many, if not most, states would quickly do something, and based on the actual experience of the various programs each state could make more informed decisions. At this point, nobody knows if single-payer or public option or co-ops or any other approach will have the predicted effects---let the states be the laboratories of democracy as envisioned by the Founding Fathers.

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