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More From the HELP Bill

The good score, as I explain below, is primarily a function of the employer mandate. But there's much else in the bill worthy of note.

The individual mandate: If you have affordable coverage available to you -- and I don't know exactly how, or if, "affordable" is defined -- and you don't purchase it, HELP envisions a penalty of not less than half the price of the coverage.

The Health Insurance Exchanges: States would run them. They would be available for the uninsured, people on the non-group market, and small businesses. There would be a so-called "firewall" preventing larger employers from using the exchanges. In the scenario where employees of a large employer are not offered coverage meeting the minimum standards and costing less than 12.5 percent of their income, then and only then can they go to the exchange. (For more on health insurance exchanges, see this primer.)

The public plan: In a slightly weird turn of events. HELP is calling its public option "the Community Health Insurance Option." You have to wonder if that's not an effort to steal some of Sen. Kent Conrad's co-op compromise thunder. It's a level-playing field style plan, and it's available on only the health insurance exchanges.

It's worth quickly doing the math on that last point. Given the composition of the exchanges that HELP is contemplating, CBO estimates that by 2019, they will have 27 million Americans enrolled. That's not all that many. And the public plan will be one of the many options on the exchanges. So imagine that a bit more than half enter the public plan -- which I'd suggest is optimistic. That's 15 million or so people in the plan. That's not a small number, but nor is it a number likely to lead to real changes in the health-care system.

This goes back to my point the other day: For health reform in general and the public plan in particular, the composition of the health insurance exchanges is arguably the single most important policy question. The larger the exchanges, the more people who will have access to a competitive insurance market (including the public plan). But the easier you make it for employers to access the exchanges, the more health reform costs because more people use government subsidies, and the more people "lose" their current coverage because their employer buys into the exchange option.

Another way of saying this is that today's CBO score is low in part because we've made some of the policy worse. It would be a good thing for 15 million Americans to move from employer-based insurance to the exchanges. It would be a good thing for 60 million Americans to do so. But no one knows how to pass that bill. So here we are.

By Ezra Klein  |  July 2, 2009; 11:32 AM ET
Categories:  Health Reform  
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Next: Primary Documents: The Congressional Budget Office's Score of the HELP Bill


I used to work for a very large company. Someone once asked the HR guy: why can't we get better health benefits (this was, oh, 10 + years ago). He said: well, we're a really large employer, there aren't so many companies that would be able to cover us.
We were spun off. All on our own.
Someone asked about health care coverage. Same HR guy said: well, we're so small, we have no say over the marketplace.

So, as HR guy above, I believe the govt will probably be talking out of both sides of their mouths. And so many of our employers will DROP the idea of coverage, we may have no choice but to get the govt coverage. And I think the problem with this (and with most bills) is this: No one ever says: what are the people out there going to do? And no one comes up with the answer: companies hate dealing with the insurance companies, and so they will cut loose their employees. The next step would be to say: so, then, what happens if THAT happens?

Again...why is the govt so intent on health INSURANCE coverage? Shouldn't they be worried about HEALTH CARE ACCESS?
Why don't they start with trials in one or two states? try out a plan or two or three? See what works? Rather than saddling 300 million people with something we don't know how it's going to work????

Posted by: atlmom1234 | July 2, 2009 11:51 AM | Report abuse


I have a question though. How does this 12.5% figure work ... is that (cost to employer of insurance)/(employee total compensation)? And if I my insurance is expensive enough to let me jump into the exchange, is my employer forced to give me a raise equal to what they were paying for my health insurance?

Posted by: NicholasBeaudrot | July 2, 2009 1:15 PM | Report abuse

Since the penalty is less than the cost of insurance, why wouldn't lots of large employers just drop coverage, thus sending all of their employees into the exchange? In this way, can't we get closer to 60 million instead of 15 million into the exchanges?

Posted by: jbrians | July 2, 2009 1:27 PM | Report abuse

-- And so many of our employers will DROP the idea of coverage, we may have no choice but to get the govt coverage. --

Wouldn't we be able to enter the exchange and choose among a set of options, including the public health insurance plan option?

Posted by: eRobin1 | July 2, 2009 1:58 PM | Report abuse

Has the CBO scored the House bill with the strong exchange AND the strong public plan?

Posted by: rbruens | July 2, 2009 2:16 PM | Report abuse

Ezra writes:

"nor is it a number likely to lead to real changes in the health-care system."

So the "public option" can't keep the insurance companies honest, which is what it (supposedly) was designed to do. I'm shocked.

Can anybody explain to me why this bill isn't going to make the country worse off?

Because if you don't keep the insurance companies honest, you get adverse selection, where the insurance companies make the taxpayers pick up the tab for those who need care, and you also leave all the for-profit incentives in place, so the insurance company business model of collect the premium while denying care is still fixed in place.

Posted by: lambert_strether | July 2, 2009 10:04 PM | Report abuse

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