And you thought all talk of a public option health insurance plan was dead. But no, Rep. Pete Stark (D-Calif.) asked the Congressional Budget Office to crunch the numbers on a public plan, funded by premiums, not taxes, and they found the following:

“The Congressional Budget Office (CBO) estimates that the public plan’s premiums would be 5 percent to 7 percent lower, on average.”

Also:

“CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the proposal would reduce federal budget deficits through 2019 by about $53 billion.”

The next year would probably save another $15 billion, for a total of $68 billion shaved off the deficit by 2020.

You can read the full CBO report here.

But look, what I said back then still applies:

It’s just not that important. It’s really not. Maybe there was a time it was, but no longer. Now it’s a withered appendage. No more people will be insured with a public option than without it. Nor will the quality of care differ. It may decrease the total cost of the bill by a few percent, but that’s it. It’s not a path to single payer. It’s not a secret government takeover of care. And I say that not caring whether you hope or fear if either of those things is true.

I’m all for saving another $53 billion a decade, but come on.  We’re spending $2.5 trillion a year on health care.  I applaud the idea of continuing to improve the system, but we need to make bigger changes than this.

But I also scoffed at opponents of the piblic option who said it would “limit competition”.  As if competition existed right now.  Quoth the AMA (not a very progressive organization):

The AMA’s most recent look at the health insurance market — “Competition in health insurance: A comprehensive study of U.S. markets,” released Feb. 23 and based on 2009 data — finds that 99% of 313 metropolitan areas tracked would be considered to have “highly concentrated” insurance markets under guidelines used by the U.S. Dept. of Justice and the Federal Trade Commission. In its 2009 version of the study, the AMA found that 94% of metropolitan areas were ranked “highly concentrated.”

Only Miami, Fort Lauderdale, Fla., and Colorado Springs, Colo., are not considered to have highly concentrated markets. But even these metropolitan areas are not deemed to have competitive markets but instead are rated as “moderately concentrated.” The Justice Dept. and the FTC would consider a highly or moderately concentrated rating as a point against a merger or acquisition of plans within the same market.

One insurer held 70% or more of the health plan market share in 24 of 43 states measured, up from 18 in 42 states in the previous year’s study. In 92% of the 313 markets in the report, one insurer held at least a 30% share.

In past releases of its survey, the AMA has noted that insurer market dominance has allowed health plans to force physicians into take-it-or-leave-it contracts. But this year the AMA — echoing other experts — noted that market dominance has allowed plans to give patients take-it-or-leave-it pricing.

Are you getting that?  Competition has gone down since last year.  Almost 100% of markets are highly concentrated, as calculated by the number of available options and their individual market share.  That means there are limited choices available, leaving people at the mercy of rate increases and coverage decreases.  Adding a public option would increase that number significantly, and therefore increase competition.

And that’s the best argument I’ve heard yet for a public option.  I still don’t think we’re going to get one right now, and I don’t think it’s worth sinking the bill over.  But if the insurance industry wanted to make sure that Democrats considered adding one in later, they sure are on the right path.

I am not a politician.  I am not an advocate.  I am never going to tell you to support or oppose a candidate, nor will I ever tell you to support or oppose any legislation. That hasn’t changed.

However, I will say this.  If you supported health care reform last week, I do have trouble understanding you if you think it should be killed this week.  The only thing that has changed is that a very weak public option has dropped.  That changes the bill very little overall.

Some have always opposed the bill because it’s not single payer.  I understand why they still do.

Others have always opposed it because they dislike any expansion of regulation or government involvement.  I understand why they still do.

But I am a bit mystified by those who loved the Senate Bill last week this week think it is more harmful than helpful.  Sorry, but that’s hard to rationalize.

I really appreciate comments!

Senate Democrats are discussing the idea of expanding Medicare by lowering the age at which the elderly could enter the government-run insurance program, Democratic sources on the Hill tell the Huffington Post.

The proposal would lower the age of eligibility for Medicare from 65 to 55, though an age limit of 60 has also been suggested. Crucial details — such as the timing of the implementation of such a reform — were not provided due to the sensitivity and ongoing nature of the deliberations. A high-ranking Democratic source off the Hill confirmed that such discussions are taking place.

This is an interesting idea.  Health insurance on the individual market for someone over 55 is not cheap.  So even if they had to pay Medicare rates, it might be cheaper than private insurance.  And Medicare is a huge “public option” with negotiating power and leverage. People know what Medicare is; they like it.

Moreover, this would have many of the side effects that progressives want and conservatives fear.  It would start a slippery slope of increasing Medicare eligibility.  If they lower it to 55, what’s to stop later lowering to 50?  And further?  And – as more and more people are on Medicare – it will seem inevitable that we will go to “Medicare for all”.

If this passes, it’s ironic that by stonewalling a weak, limited public option (that would never have gotten us to single payer), Republicans and conservative Democrats might have hastened the development of true national health insurance.

Vanity Fair finally had the bright idea to ask, “could you confidently explain what exactly the public option is to someone who didn’t know?” The answer:

I think that the public option is arguably one of the easier aspects of health care reform to understand; it’s certainly one of the most widely discussed.  And if this is how few Americans understand it, then people like me have failed in a massive way.  Horrifying.

Ezra Klein had a smart post today on the varying options left to the public option.  You should read it.  But it reminded me of just how much we’ve already given up.  So I’m re-posting some of his stuff (the italics is mine):

Separating the public option from Medicare: The Congressional Budget Office projected that pairing the public option with Medicare would save the government more than $100 billion over 10 years. (Not anymore.  They killed that in the house which is why it will now save us much less if anything)

Limiting the public option to the exchanges: This happened with somewhat less fanfare, but was similarly significant: It meant the public option would be unavailable to 90 percent of Americans. Over time, it’s possible the exchanges could expand, and if they expand, it’s possible that individuals will be able to choose the public option. (Unlikely.  Especially after the Senate guts it.  So maybe we’ll get 1-2% of Americans on it)

National or state? A national public option is likely to be a lot stronger than a public option that is run by individual states or triggered into individual states. So there are ongoing discussions about whether the public option will be national or broken up. (The whole point was to get large bargaining power.  If it’s small, it’s worthless)

Implementation. Is it available on day one? Or triggered? Can states opt in or opt out? Or do they simply offer the public option, no questions asked? (The Senate is pushing for opt-out or trigger.  And they will likely get their way)

Funding: In all the public option proposals I know of, the public option is self-funding (i.e., it works off of premium payments). But some conservative Democrats aren’t content with that, so they’re looking to build a stronger firewall between the public option and federal funds. I don’t really understand how this will work. (Neither do I.  Anything less than self-funded is actually handicapping the public option.  Awesome)

I think that there are people on the left and right who are misunderstanding the public option in the same way.  They think it’s single-payer light, some sort of slippery slope into a powerful government plan.  It’s not.  At this point, the public option has been bargained away into a small plan that will cover few Americans, will not be able to negotiate well, may be triggered, underfunded, and destined to fail.

I’m just not that into it anymore.

Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.

That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees.

In other words, now the public plan will cover fewer people than we thought before – and OMG – it might not contain costs.

Bob Cesca starts to fret, but consoles himself that it will all be OK because we have rules in place:

Now, as I take a deep breath, I hasten to note that this isn’t set in stone. Once the public option is passed into law, it will surely go through a variety of tweaks — filling in loopholes and closing gaps. Actually, it’ll probably go through further changes between now and final passage. I hope one of those changes is a clause to make sure the private insurers in the exchange can’t use the public option as a toilet.

Also, private insurers won’t be allowed to discriminate based upon pre-existing conditions, nor will they be able to engage in rescission. And there are guaranteed benefits and a risk adjustment apparatus in the exchange. It’s in the law. So it seems like the private insurers in the exchange would have to zero in on a very narrow loophole through which to dump sick and at-risk customers. And a loophole that small should be easy to repair.

No, Bob, we’ve had those rules in place before.  They don’t work. Private insurance companies are very, very good at gaming the system.

As I’ve said before, a public option is NOT single-payer.  It’s not a backdoor to single-payer.  It’s a weak method to reduce cost.  A weak public option isn’t much good at all. And that’s what people are fighting for?

I’m still in shock that Senator Reid decided to go this route.  Evidently, he has decided to go with a bill with such a public option.

Moreover, according to some reports, they aren’t even going to ask the CBO to score the “trigger” option.  If they don’t do that, I’m not sure it’s going to be even considered.

I sure hope Senator Reid knows what he’s doing.  But this should be good news to those that support a robust public option.  If they can get this through the Senate, it’s going to be in the final bill.

UPDATE: Fixed some grammar!