Olympia Snowe's Trigger Amendment
Page 207 of the thrilling "Amendments Relating to Expanding Health Care Coverage" (PDF) is going to get a lot of attention. Sandwiched between a Hatch amendment to restrict abortion and a Snowe amendment to expand subsidies to working people being offer employer-based insurance is -- wait for it -- Olympia Snowe's trigger:
This amendment establishes a non-profit government corporation through which a "safety net" plan would be provided in any state in which affordable coverage was not available in the Exchange to at least 95% of state residents. An individual would be deemed to have affordable access if either of two conditions is met. First, two or more plans are offered with premiums – the cost of which does not exceed a specified percentage of the individual‘s adjusted gross income (AGI), after deducting any available tax credit or employer subsidy from the cost of such premium. The percentage contribution shall range from 3 percent of AGI at 133 percent of the Federal Poverty Level, to 13 percent at 300 percent and above.
Assessment of affordability shall follow submission of plan premiums filed one year in advance of the first day of each policy year, and should a state be found to not meet the 95% threshold, plans would be permitted to submit of any revised premium filings, after which a second assessment of affordability shall be performed. If, after that second assessment, a state still be deemed as not meeting the affordability standard, the safety net plan shall be offered within that state, and shall be available at the pending open season enrollment.
What this says, basically, is that the public option triggers into existence in a particular state if there aren't two or more health insurance plans that cost less than 13 percent of a family's income (or a bit less below 300 percent of the poverty line).
Color me unimpressed. I could imagine a stringent trigger that becomes more aggressive with each passing year: Start at 13 percent of income, say, but by 2019, it needs to be 11 percent of income, as the idea is that insurers need to be competing to bring down costs. But this isn't that trigger. It's also hard to see a public plan in a couple of states wielding much power. It would be better if, say, five states failing to meet the affordability threshold triggered a national public option. But, again, this isn't that trigger.
The "bright" side -- if you want to call it that -- is that health-care costs are going to continue to rise faster than incomes. Within a decade or so, it'll be likely that very few states will have comprehensive policies costing less than 13 percent of income. In that scenario, the trigger does produce a bunch of public plans, at least over the long run.
But in that scenario, the plan is in all sorts of trouble, as the individual mandate is too stringent, and the subsidies are ineffective, so it's a bit hard to say what changes get made. My sense is that Olympia Snowe does not, in fact, want 50 public plans, but that does look like the long-term outcome of the trigger. The question, I guess, is how ingenious insurers will be at creating crappy plans that don't cover much but provide two "affordable choices" to delay the trigger. That doesn't seem like a good incentive for the system, but it's definitely there.
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