Non-profit Private-run Health Plan Must Never Deny Coverage

Democrats in the United States Senate, in hopes of reaching a compromise on health reform legislation, are reported to be considering a plan that would scrap the so-called “public option” for low-cost, full-coverage health insurance, in favor of a non-profit plan that would be run by the private insurers themselves, but regulated through the Office of Personnel Management. Calls to Sen. Reid and Sen.

Lieberman’s offices suggest the plan is little more than a framework proposal and is not yet written into any specific legislative language. Sen. Reid (D-NV) offers no comment on whether he favors this plan, and Sen. Lieberman (I-CT) continues to refuse to say whether he will support healthcare reform legislation, even with this compromise included. Sen. Olympia Snowe (R-ME) is said to be considering the plan, her support being necessary to get at least one Republican vote.

In order to help keep costs down and bring us closer to universal coverage, the plan is said to include a lowering of the Medicare eligibility age to 55, which would entail younger participants paying money directly into Medicare, instead of to private insurers, ostensibly to help keep Medicare solvent and lower costs for a high-risk age-group. If the non-profit, private-run plan is included, it must meet the following criteria:

  1. It must be low-cost and it must benefit from subsidies to those who cannot afford it otherwise;
  2. It can never deny coverage for pre-existing conditions;
  3. It can not refuse access based on income, geography, age or health status;
  4. It cannot in any way interfere with doctors’ and patients’ shared choices on health treatment;
  5. It cannot pay anything below what Medicare pays for treatment;
  6. It must be accepted everywhere, by every doctor and hospital;
  7. It must be regulated, so that insurers cannot institute a “medical-loss ratio” analysis intended to reduce access to care;
  8. It must be part of an overall reform that brings us to near 100% coverage…

Unless the plan meets these criteria, the entire health reform bill will fail to achieve the two main goals of opening access to health insurance to all Americans (so that people do not suffer deteriorating health and even death, due to non-coverage) and lowering costs across the board (so that families, doctors and hospitals do not face the threat of bankruptcy due to the idiosyncrasies of insurance reimbursement).

If we don’t fix those two fundamental crises in our healthcare system, we face the near certainty that our entire economy will continue to suffer intense pressure from the out-of-control and still rapidly escalating costs of the current healthcare system. One possible safeguard would be to allow policy-holders to have a role in setting policy for the non-profit plan, so that it has some of the virtues of a cooperative and the added market “efficiency” of consumers spelling out clearly what works for them.

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