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House Willing to Kill Health Insurance Public Option

Armen Hareyan's picture

Although the Senate passed a healthcare reform bill on Christmas Eve, the debate is not over. Before healthcare reform becomes law, it must combine its bill with the version passed by the House of Representatives earlier last fall. A primary point of contention between the Senate and the House was the health insurance public option. The House of Representatives, where Democrats have a solid majority, included it; on the other hand, the barely filibuster-proof majority in the Senate, which includes several unpredictable independents--eliminated it.

Still, it appears as though that fight over health insurance public option may be drawing to a close. Speaker of the House Nancy Pelosi has agreed to drop the public option from the bill, as long as there are other provisions that would have similar results on the cost of health insurance. The mostly liberal supporters of the public option believe that a government-run health insurance program would serve as competition for private insurers and make health insurance more affordable. Conservatives and centrists are concerned with its impact on the budget deficit and a potential decline in the quality of health care.

Both chambers of Congress believe that stricter regulation may be able to reach the objectives of the public option, while being more politically feasible. Pelosi, while a proponent of the public option herself, spoke to House committee chairpersons about the proposed compromise. Many progressives are angry at continuous concessions that had watered down the public option to a significant degree. Like President Obama, she is taking a pragmatic approach: she and the Senate have even set a timetable for final passage.

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By early February, congressional leaders want to work out all of their differences and get the healthcare reform issue behind them. To that end, they recently held a joint teleconference. Ideally, representatives and senators would like to avoid a bruising battle that will further tarnish their images prior to November's mid-term elections. Republicans may be less likely to take back Congress if this bill is finished, allowing Democrats to focus on other issues while letting the memories fade from voters' minds. Whether that is an effective tactic remains to be seen.

There are rumors that Senate Majority Leader Harry Reid, along with Pelosi, are considering closed-door negotiations. Blocking Republicans from the final negotiations potentially reduces rancor within the debate itself. All but a handful of Republicans are opposed to health care reform in any shape or form, and most likely have no intention of voting for the bill regardless. Therefore, their input would do more to turn off progressive Democrats than it would to gain right-leaning votes.

Despite the House's willingness to drop the public option, they refuse to capitulate completely to the Senate. If the bill does not hold health insurance companies sufficiently accountable for the uninsured and under-insured among the American population, it will be unacceptable for them. Since America's Health Insurance Plans, the industry's lobby, is against both healthcare reform bills, they may have less to lose by trading the public option for more regulation.

What kind of regulation does the House of Representatives want in exchange for the public option? In addition to existing tax increases and caps on administrative costs, they want to eliminate the antitrust exemption for health insurance carriers. Currently, only a few industries - including Major League Baseball - enjoy such an exemption. If health insurance companies continue to be exempt from antitrust law, some fear that insurers will practice collusion. The Senate's bill does not repeal the antitrust exemption, whereas the House's already does. This will be a very important issue affecting the speed of the bill's final passage.

Written by Yamileth Medina
VitalOne Health Plans Direct, LLC.