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Franken signs Senate letter supporting public option in health care reform

WASHINGTON, D.C. — Sen. Al Franken signed on to a letter [PDF] today that urges Senate Majority Leader Harry Reid to include a government-run public insurance plan in the final version of the health care reform bill.

“Minnesotans I’ve talked to around the state want to see real health care reform,” the Minnesota Democrat, who sits on the Senate Health Committee, said in a statement. “They know that the status quo is unsustainable, and they want security, stability, and affordability in the plans they’re choosing for themselves and their families. Minnesotans are telling me to fight for a public health insurance option because they know it’s the clearest way to keep down costs and hold insurance companies accountable.”

The Senate Finance Committee has voted down two attempts to include a so-called public option in its version of the health care reform bill, which likely will come up for a final vote next week.

Sen. Max Baucus, D-Mont., who heads the committee, has previously said that the votes do not exist in the Senate to pass a bill with a public option.

Opponents of a public option argue that it would create an unwieldy bureaucratic mess that would strangle the private insurance market. Proponents say that it is the most effective way to bring down costs.

The letter, authored by Sen. Sherrod Brown, D-Ohio, a Senate Health Committee member, states that the public option has the support of all the health committee’s Democrats, three-quarters of those on the Finance Committee and what signers believe to be a majority of the caucus.

“We are concerned that — absent a competitive and continuous public insurance option — health reform legislation will not produce nationwide access and ongoing cost containment,” the senators wrote.

The Senate Finance bill contains a co-op proposal in lieu of a public option. In the letter, the senators criticized this approach.

“While promoting more co-ops may be a worthy goal, it is not realistic to expect local co-ops to spring up in every corner of this country,” the senators wrote. “There are many areas of the country where the population is simply too small to sustain a local co-op plan. We are also concerned that the administrative costs associated with financing the start-up of multiple co-op plans would far outstrip the seed money required to establish a public health insurance program.”

Sen. Amy Klobuchar, who has not come out for or against the public option, has not signed the letter, according to a version of the letter that MinnPost obtained.

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Comments (3)

  1. Submitted by Bernice Vetsch on 10/09/2009 - 12:45 pm.

    Some analysts/economists have noted that, to be competitive with the insurance companies, a co-op has to open with at least 500,000 people. Not likely.

  2. Submitted by Gary Lee on 10/09/2009 - 01:13 pm.

    I like seeing the acknowledgement in the letter that purchasing co-ops may not work for all states. Another way of looking at this is to say that states with small populations will suffer from the same disadvantages in running a purchasing co-op as small businesses currently suffer when trying to find a plan for employees. Bluntly, the larger the group the better the rates, and the smaller the group, the more that small group pays. Small employers get lousy deals from insurers now. Small states will get lousy deals under a co-op plan.

  3. Submitted by Steve Titterud on 10/12/2009 - 08:55 am.

    Here’s yet another way to look at the “co-op” idea: the health insurance industry is not against it. It won’t reduce their profits one bit and represents no threat whatsoever.

    There are enormous difficulties and capital costs in starting up health care administrative functions from scratch, including provider networks, claims processing, eligibility functions, case management, premium collections, sales/marketing, and technology infrastructure – to name a few. Just ask one of those executives at Health Partners how much they have invested in building and maintaining these things over the years.

    In the early days of these co-ops, they would probably have to buy many of these services from the existing insurance industry. Where else could you get them? What are you gonna do, roll your own? And except for the very biggest co-ops, they would likely be unable to function over time without third party vendors of these services.

    No wonder the health insurers think these co-ops are a fine idea!

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