Last Thursday the San Francisco Chronicle reported that under the current bills being considered in the House and Senate, 90% of Americans would not be able to pick a public health insurance option. The proposed rules would limit access to the Exchange, where the public option would be offered, to "individuals who cannot get insurance, or whose health care costs exceed 12.5 percent of their income."

Not only would that mean most Americans wouldn't have access to the public option - it also means that public option would be weaker. For the public option to bring down costs and provide quality care, it needs to have a large base of paying customers to be able to negotiate good rates. Further, it needs to be able to attract healthy young people. If it can't, then the public option may suffer what is known as "adverse selection" where only the sickest people get the public option. That would drive up the costs of the public option, and make it less effective.

In order to make the public option provide the most benefits for the most people, we need to open it up so that anyone who wants to buy into it may do so. Oregon Senator Ron Wyden is offering an amendment to allow anyone to access the Exchange, where the public option will be offered. Senator Barbara Boxer has already indicated her support for the Wyden Amendment. It's now up to Senator Dianne Feinstein to join Boxer, Wyden, and the American people in demanding everyone be allowed to choose the public option.

That's why we sent the following email to our members today, asking them to sign the letter to Senator Feinstein asking her to open the public option to everyone:   Read More »

Arnold Schwarzenegger wrote a letter to California's Congressional leaders today about health care reform. Most of it is a long extended whine about the feds not offering enough money to states to provide for health care, since Arnold believes California should not be spending much money to help people get health care.

But there's also an interesting proposal from our governor about the public option. Basically, he wants to use the "opt-out" as an opportunity for California to design its own public option, one that would benefit fewer people than the federal option:

In terms of state coverage options, I support the inclusion of language that will provide states the option of developing state-based insurance options for people with incomes above 133 percent of the federal poverty level but below 200 percent. I believe this provision can be strengthened and made more effective by allowing states, especially those with higher costs of living, to serve populations up to 300 percent FPL, providing states access to at least 95 percent of the tax credits and cost-sharing subsidies available for eligible individuals in the state and ensuring sufficient state flexibility to enable continuity of care between Medicaid and the state-based option. Providing states with the flexibility to set eligibility to 300 percent of the federal poverty level recognizes different cost structures across states and is more consistent with existing income eligibility thresholds allowed under the federal children’s health insurance program, which will help support the policy goal of keeping families together for health insurance purposes.

Finally, creating transparent and user-friendly health insurance exchanges at the state level can help facilitate the enrollment process. At the same time, I believe these state-based exchanges must be more than simple clearinghouses of information, but instead allow states to certify plans and negotiate within broadly established federal parameters to help promote competition among health plans. I also continue to believe that states must remain the primary regulator of health insurance in order to maintain the strongest consumer protections possible.

What this means is that Arnold Schwarzenegger would have California exercise the opt-out in order to design a "public option" much more restrictive in who it is available to, provided in state-based exchanges instead of through a national system. Alongside protecting the customer base of his insurance industry allies, this would also enable California to force the people who would want a public option to jump through a number of hoops designed to discourage them from actually getting the benefit, as California now does with things like IHSS, food stamps, and such.

Some may argue that California would never go for this kind of "Arnold option," but let's consider some things here. First, the Senate language regarding the opt-out has yet to materialize. Arnold may well be mainstreaming right-wing and corporate talking points that could be used by conservadems in the Senate to shape the opt-out in a way that would have the program more closely resemble the Nixonian "block grants" that have given states too much power to restrict federally-mandated benefits. In short, Arnold might be saying "hey, here's how the opt-out should look!"

Arnold may also be setting up the language and framing that could be used by Republican gubernatorial candidates to deal with federal health care reform. In a state where the public option concept is popular, Arnold could be showing how the public option could be neutered in practice while preserved in name.

In a state that has gutted much of its public sector over the last two years, with bipartisan support the entire time, it's a strategy worth watching closely. Especially since the outcome of the federal health care reform project now appears to be a shifting of the battleground to the states.

UPDATE by Robert: John Myers reports via Twitter that "Guv's ofc says his health care letter should not be interpreted as support for opt-in/opt-out public option" and that, quoting a governor's office spokesperson, Arnold "is calling for state-based insurance options to offer coverage for lower income populations not eligible for Medicaid."

That's what the Courage Campaign, Credo Mobile and Democracy for America are asking today. We are teaming up to urge Senator Feinstein to come out with a definitive statement in support of the public option.

The response you get on Senator Feinstein's position on the public option varies, depending on what staffer you get on the phone. Not true of Senator Boxer (from her campaign's blog) who isn't afraid to be clear about her support for the public option:

She laid out where she thinks these complex negotiations will lead and why it’s so important: “I do think we’ll have a public interest option at the end of the day because we have to contain the costs.” And “what is the best way to keep down the cost? I think it’s competition and I think a public interest plan will do just that.” Which is exactly why Boxer has long been a cosponsor of Sherrod Brown’s Senate resolution declaring that “any efforts to reform our Nation’s health care system should include as an option the establishment of a federally-backed insurance pool to create options for American consumers.”

With the Senate about to return from the August recess, it is crucial that Senator Feinstein take a firm stance on the public option and work to get it passed.

There are some rumors that she will be issuing a statement about the public option tomorrow. The best way to ensure that it happens is to keep the pressure up on Senator Feinstein. So sign the letter. Check the flip for the full email we sent out to our members today.   Read More »