If you read nothing else on this post read the last two paragraphs at the bottom.

We’re being had.

The Senate HELP Committee “public option” will be multiple “options,” and these will be run by insurance companies

Posted by Andrew Coates MD on Friday, Aug 14, 2009

By Kip Sullivan, JD [Physicians for a National Health Program]

When the Senate Health, Education, Labor and Pensions (HELP) Committee passed a bill on July 15 creating an anemic “public option” program, Health Care for America Now (HCAN) and other “public option” proponents were ecstatic. They welcomed the “public option” in the HELP committee bill, proclaiming it “strong” or “robust.”  But the actual provisions in the HELP Committee bill call for numerous “community health insurance options,” not the single “Medicare-like” plan promised by “public option” advocates. That means the individual “options” will probably be as small and weak as the co-ops now under discussion in the Senate Finance Committee. More importantly, these “community options” will almost certainly be run by insurance companies.

Finding the HELP Committee bill

To determine what the HELP Committee “public option” proposal is, one must first find a final version of the legislation that came out of the committee. Ordinarily, that is not a difficult process. But for some reason, the HELP Committee bill still has no bill number and, three weeks after it was voted out of the HELP committee, still is not available for the public to read. That might sound like a sloppy way to run a Senate committee, but I have confirmed with two sources that there is no final bill available.  An aide in the Washington office of Senator Al Franken (D-MN), with whom I spoke on August 7, referred me to the draft bill posted at the HELP Committee’s Website.  At this Website, the draft bill appears in two pieces, one labeled “the Affordable Health Choices Act” and the other labeled “the additional Chairman’s mark on coverage.”  It is in the “Chairman’s mark” segment of the bill, beginning at page 77, that we find “Section 3106: Community health insurance option.”

Summary of Section 3106 in semi-plain English

Section 3106 is difficult to read. It fails to offer clear definitions of critical terms, it uses different terms to describe the same thing, and it contains unnecessarily abstract language.  Because it is poorly written, it requires at least two readings to understand it.  I will tell you first what I derive from it in the plainest language possible, and then discuss some of its provisions so you can judge for yourself whether I got it right.

Section 3106 requires the Secretary of the Department of Health and Human Services (DHHS, the federal agency within which Medicare and Medicaid are housed) to create multiple health insurance companies that, together, will make “public” health insurance available for sale to the non-elderly in every state in the country.  The Secretary will not be using federal employees to make this happen.  The Secretary is required, rather, to contract with nonprofit insurance companies to create health insurance policies that will qualify as “community health insurance options.” (Some of the bill’s language seems to be confusing by design.  What meaning is conveyed by adding “community” and “options” to “health insurance”?)

The corporations that contract with the Secretary to create these “community” health insurance companies will be required to meet the same standards insurance companies currently must meet in order to serve as “Medicare Administrative Contractors” (MACs) to administer Medicare’s traditional program. These corporations must, in other words, be insurance companies.

To get some idea of which insurance companies meet current MAC standards, and are therefore the ones likely to get contracts with the Secretary under the HELP Committee bill, consider this list of the companies that now have MAC contracts with the Centers for Medicare and Medicaid Services (CMS, the agency that runs Medicare):

• Cahaba Government Benefit Administrators, a subsidiary of Blue Cross and Blue Shield of Alabama;
• First Coast Service Options, a subsidiary of Blue Cross and Blue Shield of Florida;
• Highmark Medical Services, a division of Highmark Blue Cross Blue Shield of Pennsylvania;
• National Government Services, a subsidiary of WellPoint, the nation’s largest health insurance company measured by enrollment (as opposed to revenues);
• National Heritage Insurance Corporation, which is a subsidiary of Electronic Data Systems (the firm Ross Perot founded) which is now a subsidiary of Hewlett Packard;
• Noridian Administrative Services;
• Palmetto GBA, a subsidiary of Blue Cross Blue Shield of South Carolina;
• Pinnacle Business Solutions, a subsidiary of Blue Cross Blue Shield of Arkansas;
• Trailblazer Health Enterprises, a subsidiary of Blue Cross Blue Shield of South Carolina;
• Wisconsin Physicians Services Health Insurance Corporation.

Most of the large health insurance companies, such as United HealthCare and Cigna, have also held similar contracts in the past.

Now that I’ve tried to explain Section 3106 in the Mother Tongue, it is time to immerse ourselves in the actual bill language. In the next section I review the language that indicates Section 3106 is proposing multiple “options,” not a single Medicare-like program. In the section after that I review the language that indicates the multiple “options” will be created by nonprofit insurance companies like Blue Cross Blue Shield.

Decoding Section 3106: Is it one “option” or multiple “options”?

Section 3106 proposes multiple “options,” not a single Medicare-like program, but this is not apparent at first. The first three sentences contradict each other.  The very first sentence says there will be multiple “options” serving “communities” (not the whole country):

“Nothing in this section shall be construed to require a health care provider to participate in a community health insurance option….”

The second sentence says the same thing about individual patients and repeats the phrase – “a community health insurance option.” These first two sentences indicate the HELP Committee is referring to an entity at the “community” level, not the national level, and the Committee anticipates there will be many of these entities, not just one of them.

But the third sentence confuses the reader by referring to the local entities as a single program:

“The Secretary [of the Department of Health and Human Services] shall establish a community health insurance option to offer … health care coverage… throughout the United States.”

But as we read on, we encounter provision after provision that indicates the HELP Committee definitely envisions a balkanized “option.” Some provisions reveal that intention by referring to “options” plural. Others reveal it by giving the states the authority to determine essential features of “options” sold within their boundaries, such as the required reserve levels and maximum benefits. A single national program can’t have 50 different reserve requirements and 50 different benefit levels.

Here are two examples of the use of “options” plural in Section 3106: (1) Under a section entitled “Applicable rules,” we learn a previously enacted law “shall apply to community health insurance options”; and (2) a section entitled “Ombudsman” begins,“In establishing community health insurance options, the Secretary shall….”

Here are two examples of provisions giving the states authority to define key features of “options”: (1) The only sentence in a section entitled “States may offer additional benefits” reads, “A state may require that a community health insurance option offered in such State offer benefits in addition to the essential health benefits required under [another subsection]”; and (2) under a section headed “Solvency,” we find, “A community health insurance option shall … be subject to the solvency standard of each State in which such community health insurance option is offered.”

A patchwork of 50 different reserve requirements and 50 different benefit levels seems a far cry from “public option” proponents’ vision of a single, Medicare-like plan covering the whole country.

Decoding continued: “Option” means Blue Cross Blue Shield

The second major cause of confusion in Section 3106 is its use of four terms, all of them vague, to describe the insurance companies that will sell the “options.” The bill uses these four terms interchangeably: “community health insurance option,” “qualified carrier,” “qualified entity,” and “contracting administrator.”

A brief example: In subsection 1 of a section entitled “Start-up Fund,” the bill establishes a “Health Benefit Plan Start-up Fund … to provide loans for the initial operations of a community health insurance option.” But subsection 2 says loan money from this fund is supposed to go to “carriers,” and subsection 3 says it shall go to “contracting administrators.” (“Carriers” is a term Medicare just phased out after four decades of use. The term referred to insurance companies which processed claims from doctors. Medicare now uses the term “Medicare administrative contractors.” The HELP Committee’s bill writers no doubt meant to refer to “contracting administrators,” not “carriers.” As I indicated above, “contracting administrators” will look almost exactly like the MACs that now serve Medicare.) Finally, subsection 5 says the loans must be repaid by “the community health insurance option” (not carriers or contracting administrators).

The only reasonable interpretation of this goulash is that insurance companies known as “contracting administrators” will be put in charge of creating health insurance companies all over the country that will contain “community health insurance” in their titles.

This interpretation is confirmed by subsequent provisions in Section 3106.  In a section entitled “Authority to contract,” the bill says the Secretary may “enter into a contract with a qualified entity” to perform the same duties MACs perform for Medicare, and once this contract has been signed the entity becomes “a contracting administrator.” (These contracts must last at least five years and may not last more than ten years.) In addition to meeting the MAC standards, contracting administrators have to be:

• non-profit;
• able “to offer a community health insurance option”;
• “eligible to offer health insurance” (I assume this strange phrasing means the insurance company is licensed in the state where it hopes to sell “options”);
• able to achieve “delivery of benefits”; and
• able to “promot[e] high quality clinical care.”

The requirement that the contracting insurers be able to “promote high quality clinical care” is a tip-off that the HELP Committee wants the insurance companies that will run the “community options” to use managed care cost-control tactics. A second tip-off is that Section 3106 does not guarantee patients the right to choose their own clinic and hospital.  Instead the bill only requires that a ”community” insurer will be one that “offers a wide choice of providers.”  In short, an entity that meets the MAC standards plus the additional criteria in Section 3106 amounts to your basic, non-profit managed care insurance company. The big ones these days include many Blue Cross Blue Shield companies and the nonprofit HMOs such as Kaiser Permanente, Group Heath of Puget Sound, and HealthPartners.

The only conceivable development that could keep existing non-profit insurance companies from winning the contracts to develop and run the “community options” would be the birth of dozens of non-profit companies with the expertise of insurance companies between the time Section 3106 becomes law and the time the law takes effect. In theory, that could happen. But it is extremely unlikely. It is unlikely because of the short time period between the date Section 3106 is enacted and the time it takes effect, and because of the difficulty of creating corporations with the expertise to create health insurance companies.

Section 3106 does contain language that should please HCAN and other “public option” advocates who were expecting the HELP Committee to endorse a Medicare-like “option.” In two places, Section 3106 says the Secretary “shall negotiate” provider rates. But without a guarantee that the “options” in each state will enroll tens or hundreds of thousands of people, and without a requirement that providers participate, this is a meaningless provision.

This leads me to my last observation about Section 3106.  How are contracting administrators supposed to create a customer base and a network of providers? Can they do it with whatever loans will be made available to them from the Start-up Fund? Section 3106 offers no answers to these questions.

Implications

If my interpretation of Section 3106 is correct – if the Senate HELP Committee’s “option” program is going to be balkanized and run by the nonprofit wing of the insurance industry – then reasonable people have to conclude that the deck is really stacked against the Committee’s “option” program. Even if Section 3106 authorized public employees, not Blue Cross Blue Shield employees, to create the dozens or hundreds of “community health insurance options” called for by Section 3106, the program would fail to pose any challenge to the insurance industry and might even die in the cradle. The health insurance industry has been very difficult to break into since at least the 1980s, and has become more so in the wake of the merger madness that swept through the industry in the early 1990s. But if public employees are not going to be directly responsible for creating the “community options” – if the nonprofit wing of the insurance industry is going to be doing that – then the entire “community option” project of the Senate HELP Committee amounts to a cruel joke on the public. Should the public trust corporations like Blue Cross and Kaiser Permanente to make a good faith effort to build competing insurance companies?

Section 3106 is a mess, but its meaning becomes clear after several readings. Section 3106 does not create the “Medicare-like” program promised by Jacob Hacker, HCAN, Howard Dean, and other “option” advocates. Instead it proposes a program that authorizes DHHS to create numerous health insurance companies tied to geographic areas, and to contract with members of the existing insurance industry to create and possibly run those companies.

Leaders of the “public option” movement have an obligation to advertise the HELP Committee bill truthfully. It is not accurate to say the HELP Committee bill creates a “robust” or “strong” public option. It is not even accurate to say the HELP Committee bill creates one “option.” The truth is the “option” is balkanized and very weak. In fact, HCAN, Andy Stern, Howard Dean and other “option” advocates who have praised the HELP Committee bill should do more than cease to praise it. They should tell Congress they oppose it.

Kip Sullivan is a member of the steering committee of the Minnesota Chapter of Physicians for a National Health Program.

And this is what these Senators were elected to do?

The Huffington Post reported today

Bowing to Republican pressure, President Barack Obama’s administration signaled on Sunday it is ready to abandon the idea of giving Americans the option of government-run insurance as part of a new health care system.

Facing mounting opposition to the overhaul, administration officials left open the chance for a compromise with Republicans that would include health insurance cooperatives instead of a government-run plan. Such a concession probably would enrage Obama’s liberal supporters but could deliver a much-needed victory on a top domestic priority opposed by GOP lawmakers.

Officials from both political parties reached across the aisle in an effort to find compromises on proposals they left behind when they returned to their districts for an August recess. Obama had sought the government to run a health insurance organization to help cover the nation’s almost 50 million uninsured, but he never made it a deal breaker in a broad set of ideas that has Republicans unified in opposition.

This news really dismays me.

Health and Human Services Secretary Kathleen Sebelius said that government alternative to private health insurance is “not the essential element” of the administration’s health care overhaul. The White House would be open to co-ops, she said, a sign that Democrats want a compromise so they can declare a victory.

Under a proposal by Sen. Kent Conrad, D-N.D., consumer-owned nonprofit cooperatives would sell insurance in competition with private industry, not unlike the way electric and agriculture co-ops operate, especially in rural states such as his own.

With $3 billion to $4 billion in initial support from the government, the co-ops would operate under a national structure with state affiliates, but independent of the government. They would be required to maintain the type of financial reserves that private companies are required to keep in case of unexpectedly high claims.

Sebelius said the end-of-life proposal was likely to be dropped from the final bill.

“We wanted to make sure doctors were reimbursed for that very important consultation if family members chose to make it, and instead it’s been turned into this scare tactic and probably will be off the table,” she said.

Frankly I am really disappointed. It appears the Obama administration is caving in to the Insurance and Pharmaceutical Industries who have fought against the reform from day 1. I’m disappointed in the Senate as well. I would have hoped that the Senators would have realized what the 2008 election for change meant to us ordinary people out here. Guess not. They certainly seem to understand what change means to their financial benefactors—big corporations–who steadily keep campaign contributions flowing to them. The House listened and passed from Committee HR 3200. God knows what the full house will do when they vote.

I’m confused and disgusted. Democrats control the Senate, House, and White House yet fold on the most major piece of legislation in history.

I assign the core of the blame on the Senate. With 60 votes they could pass the bill, with the public option, yes even with single-payer healthcare. The House has far more Democratic votes than the Senate. I gives me no concern whatsoever that passing healthcare reform with a single-payer public option would be without bipartisan support. The Republican Leadership pulled a cool move in getting the Congress to take August off rather than stay with it and pass the reform. It would be, it seems to me, the right thing to do for the American people, particularly those 50 million uninsured.

It makes me pause and make a decision as to how I want to proceed forward. I feel so betrayed, and sold out by the Democrats. Makes me wonder why I spent all that time during the 2008 campaign working so hard for change.

It is going to take me some time to sort it all out. I’m just sick to my stomach.

Rachel Maddow

Rachel Maddow appeared on “Meet the Press” for the first time on Sunday, August 16th. On a panel with former Senate Majority Leader Tom Daschle (D-S.D.), former House Majority Leader Dick Armey (R-Texas), and Sen. Tom Coburn (R-Okla.), the MSNBC host more than held her own.

When Armey said he took no responsibility “whatsoever” for the virulent protests against President Obama and compared it to MoveOn.org running an ad comparing President Bush to Hitler, Maddow pointed out that that never actually happened. Later she elaborated, pointing out that major conservative groups had speakers going around the country comparing Obama to Hitler, Pol Pot and Stalin and asking supporters to put the fear of God in their congresspeople. When Armey said that he denounced violence, Maddow pointed out that his organization, FreedomWorks, was in a coalition whose website was promoting the violent fight at a Tampa town hall as a good thing.

Maddow also questioned President Obama for not getting more personally involved in the legislation while Sen. Max Baucus (D-Mont.) is letting Republicans on the Senate Finance Committee have an equal say even though a huge Democratic majority was voted in in November.

I favor a single-payer health care system, personally. But the chances of Congress instituting that kind of reform given recent strident Republican-fueled resistance, are diminishing. Realizing compromise is an inevitable component of the legislative process, I am content to support the current reform efforts. At least President Barack Obama and our leading Democratic politicians are working to make things better.

During Congress’s August recess, Republican malcontents have escalated their attacks on health care reform—and that’s only to be expected. I anticipated some of the usual conservative grievances: complaints about the federal deficit, concerns over taxes for families and small businesses, claims that big government is more dangerous than Big Insurance.

But I was unpleasantly surprised by some of the tactics I observed. Many opponents to health care reform have resorted to rumor-mongering and dispersing outright lies, and they have occasionally become quite vocal, and even physical, at some representatives’ town hall meetings. At one Colorado rally, a car bearing an Obama campaign sticker and a flyer for SEIU, a service workers’ union, sustained $3,000 in damage. These disruptions appear aimed entirely at producing bad publicity—I really don’t see how claims of forced euthanasia (like those perpetuated by conservative commentator Betsy McCoy (sic) [Her last name is McCaughey] on Fred Thompson’s radio show) can stem from any existing provisions of the bills in Congress.

I have noticed, though, that those who choose to disrupt these meetings seem fully and completely convinced that their wild claims are true. They have been manipulated—whether by an individual, by an interest group or by an entire industry—to believe that their propaganda is unbiased and no-nonsense news, that those who disagree are just condescending or ignorant, that they alone know what is best for the nation.

Though these people are undoubtedly entitled to express their ideas (or, rather, to express someone’s ideas), I find this behavior worrisome, especially considering the ease with which some reformists can disregard it. There is quite a large difference between a freethinking and rational citizen and an unthinking vehicle for misinformation. It’s the difference between being civically engaged and being, well, disengaged—and not knowing it.

via Freedom of Expression Doesn’t Guarantee Freethinking Citizens (Washoe County Democrats).

The First Amendment to the United States Constitution reads:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Town Hall Meetings being held throughout the United States concerning Healthcare Insurance Reform is receiving considerable attention from the media for the rowdy behavior of some in attendance. Epithets are being shouted which disrupt an orderly exchange of information and ideas.

Issue: Is offensive speech within the bounds of the First Amendment?

In Chaplinsky vs. New Hampshire decided by the U.S. Supreme Court decided the issue. [1942] (315 U.S. 568) The state statute provided:

“…any offensive, derisive or annoying word to any other person who is lawfully in any street or other public place,” or “call him by any offensive or derisive name,” was construed by the New Hampshire Supreme Court as limited to the use in a public place of words directly tending to cause a breach of the peace by provoking the person addressed to acts of violence.

Facts:

Chaplinsky was distributing Jehovah’s Witness literature on a public street on a busy Saturday. Members of the local citizenry complained to the City Marshal that Chaplinsky was denouncing all religion as a “racket.” The Marshal told them Chaplinsky was lawfully engaged, and then warned Chaplinsky the crowd was getting restless. Later, a disturbance occurred. A traffic officer on duty at the busy intersection started with Chaplinsky for the police station, but did not inform him that he was under arrest or that he was going to be arrested. Enroute they encountered the Marshal, who had been advised a riot was under way and was hurrying to the scene. The Marshal repeated his earlier warning to Chaplinsky, who then addressed the Marshal with the words set forth in the complaint.

The complaint alleged Chaplinsky “with force and arms, in a certain public place in said city of Rochester, to-wit, on the public sidewalk on the easterly side of Wakefield Street, near unto the entrance of the City Hall, did unlawfully repeat the words following, addressed to the complainant, that is to say, ‘You are a God damned racketeer’ and ‘a damned Fascist and the whole government of Rochester are Fascists or agents of Fascists,’ the same being offensive, derisive and annoying words and names.”

A jury convicted Chaplinsky. Over Chaplinsky’s objection, the trial court excluded, as immaterial, testimony relating to Chaplinsky’s mission “to preach the true facts of the Bible,” his treatment at the hands of the crowd, and the alleged neglect of duty on the part of the police. This action was approved by the court below, which held that neither provocation nor the truth of the utterance would constitute a defense to the charge.

The New Hampshire Supreme Court upheld the conviction. On appeal Chaplinsky raised the questions that the statute was invalid under the Fourteenth Amendment of the Constitution of the United States in that it placed an unreasonable restraint on freedom of speech, freedom of the press, and freedom of worship, and because it was vague and indefinite. These contentions were overruled, and the case came to the U.S. Supreme Court on appeal.

The U.S. Supreme Court Held:

“…it is well understood that the right of free speech is not absolute at all times and under all circumstances. There are certain well defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem.  These include the lewd and obscene, the profane, the libelous, and the insulting or “fighting” words — those which, by their very utterance, inflict injury or tend to incite an immediate breach of the peace. It has been well observed that such utterances are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality.”

“Resort to epithets or personal abuse is not in any proper sense communication of information or opinion safeguarded by the Constitution, and its punishment as a criminal act would raise no question under that instrument.”

“The word “offensive” is not to be defined in terms of what a particular addressee thinks…. The test is what men of common intelligence would understand would be words likely to cause an average addressee to fight…. The English language has a number of words and expressions which, by general consent, are “fighting words” when said without a disarming smile…. [S]uch words, as ordinary men know, are likely to cause a fight. So are threatening, profane or obscene revilings. Derisive and annoying words can be taken as coming within the purview of the statute as heretofore interpreted only when they have this characteristic of plainly tending to excite the addressee to a breach of the peace…. The statute, as construed, does no more than prohibit the face-to-face words plainly likely to cause a breach of the peace by the addressee, words whose speaking constitutes a breach of the peace by the speaker–including “classical fighting words,” words in current use less “classical” but equally likely to cause violence, and other disorderly words, including profanity, obscenity and threats.”

“Argument is unnecessary to demonstrate that the appellations “damned racketeer” and “damned Fascist” are epithets likely to provoke the average person to retaliation, and thereby cause a breach of the peace.”

The U.S. Supreme Court affirmed Chaplinsky’s conviction. The use in a public place of words directly tending to cause a breach of the peace by provoking the person addressed to acts of violence is not protected by the First Amendment.