Ryan Grim at Huffington Post is reporting that tomorrow Nancy Pelosi will introduce a bill that contains a public option whose reimbursement rates will be negotiated with providers. House progressives have fought hard for simpler and less expensive Medicare + 5% rates.
all indications are that the progressives have lost this round and that Pelosi will include a public option that is required to negotiate rates with providers.
Politico confirms this information and actually names a source:
Education and Labor Committee Chairman George Miller confirmed those decisions after leaving a Wednesday evening session to discuss the bill with second-term Democrats.
Grim's article notes that using negotiated rates will hamper the public option when competing against private insurers. It will also be more expensive to taxpayers by $85 billion over 10 years.
Despite the Blue Dogs' reputation as fiscal conservatives, they have supported negotiated rates over the robust public option.
But such confusion misreads the Blue Dog Coalition, which is more properly understood as a bloc of Democrats who favor business interests. In the case of the public option, requiring it to negotiate rates means higher payments to providers -- hospitals, doctors and drug makers -- and less competition for insurance companies.
However, the negotiated rate plan cover just as much of the population:
Leadership paved the way for negotiated rates on Tuesday evening, leaking Congressional Budget Office numbers showing that the bill including negotiated rates will cover as many people -- in fact, slightly more -- than the plan with a robust option.
There was no information about how the negotiated rates would affect the financial burden of obtaining insurance, how much of the population the House plans to let into the exchanges, or how much the plan will rely on expanding Medicaid eligibility.
I have mixed opinions about this news. Medicare + 5% would have been well understood, less expensive, and transparent to all. On the other hand, the Medicare fee-for-service reimbursement structure is badly in need of reform to better reward efficiency, preventive care and care for chronic diseases. Congress also has a bad habit of trying to micromanage Medicare reimbursement rates, and efforts by the Obama administration to transfer control of Medicare rates to a panel of experts have encountered stiff opposition from Congressional leaders.