Wednesday, October 7, 2009

Why Doesn't Ken Conrad Support the Public Option?

In a recent interview with Ezra Klein, Ken Conrad explained:

I don't think a government-run plan best fits this culture. A plan that's not government-run has the best chance of succeeding in being passed into law.

Second, and this is very important to my thinking, the public option as defined by the committee of jurisdiction in the House, the Ways and Means Committee, is tied to Medicare levels of reimbursement. My state has the second-lowest level of Medicare reimbursement in the country. If my state is tied to that reimbursement, every hospital goes broke. People say, "Just fix it." I've been on the Finance Committee more than 15 years. I've been trying to fix the unfair aspects of Medicare reimbursement all the time. We run into the House. Membership is determined by population, and the big population states write levels of reimbursement that unfairly treat hospitals in states like mine. My hospitals get one-half as much as urban hospitals to treat the same illnesses.

A key argument against the "strong" public option -- one that would pay Medicare reimbursement rates -- is that we already have an enormous degree of cost shifting onto private insurance plans. Another Medicare-like plan could potentially widen the gap between government reimbursement rates and private reimbursement rates, and ultimately do little to reduce aggregate health care costs.

Conrad's position is quite different, and I think far more interesting. He's doesn't seem to be concerned about the cost shifting. Instead, he's focused on the regional variations that we've seen among Medicare reimbursement rates.

According to Conrad, these variations are impossible to correct because the membership in the House of Representatives is, by Constitutional design, proportional. Thus, hospitals in states with larger populations -- and more Congressional representation -- will always see relatively decent Medicare reimbursement rates, while hospitals in states with smaller populations will always get shafted.

The senator suspects that we would see a similar pattern with a "strong" public option that offered a Medicare-like payment scheme.

But what about the "level-playing field" public option proposed by Chuck Schumer, which would not be empowered to dramatically undercut private insurance rates? Why did Ken Conrad vote against this version of the public plan?

My guess would be that Conrad simply doesn't trust the claims of his big-state party members . . . .

What do you think?

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