HAPPY TRAILS, TRIGGER?

Okay, my apologies to Roy Rogers, but I was pleased to see in the New York Times that the idea of a public plan trigger is finally getting serious consideration by the White House and by Senate Finance Committee members.

I proposed the trigger concept in a piece that ran in The Health Care Blog back in March. It was clear then that a nationwide public plan faced very considerable political obstacles, and I suggested that a more acceptable approach might be to establish a public plan option that would be implemented only where and when private plans failed to meet predetermined cost control targets.

Senator Olympia Snowe proposed the trigger approach to fellow members of Senate Finance some weeks ago, and the NYT reports that the White House—desperate for at least one Republican vote in the Senate—is now analyzing its political feasibility and practicality.

Senator Snowe’s approach, reflecting the situation in her home state of Maine, where the market is dominated by a single insurer, would tie the trigger to affordability, rather than to cost control. This approach has political advantages, but could be labeled as unfair, since it includes a factor that private plans cannot control—individual incomes—in the trigger comparison. It also has the disadvantage of focusing on individuals who are just above the Medicaid income threshold. To achieve affordability for this lower-income group could mean a public plan network virtually identical to that of Medicaid, raising the question: why not just allow this group to buy-in to Medicaid?

However, any trigger is probably better than the nationwide public plan option. It’s also more realistic than Senator Conrad’s proposal for health cooperatives, a concept that has never been successfully implemented (Seattle’s Group Health Cooperative, despite its name, is a Kaiser-type HMO). The experience of Medicare Advantage, in which the private plans with most enrollees cover the basic benefits at lower cost than the government-administered FFS plan, suggests that a trigger approach could provide the best of both worlds. In most areas, especially with real price competition through an exchange, the private plans would compete only with each other, while in those areas in which private plans failed to meet established benchmarks, the trigger would result in public plans being created to provide additional competition.

There is a precedent for a trigger approach. As the NYT points out, the legislation creating the Medicare drug program included a provision for establishing a government drug plan in any area with fewer than two private plans. This hasn’t happened, of course, because competition for Medicare D business has been fierce—and has probably contributed to program costs far below the projections of CMS actuaries.