WASHINGTON, D.C. — In the political match that is the health care debate in Washington, the formerly down-and-out public option appears to be making a comeback.
The inclusion of Medicare payment reforms Thursday bolstered support among a group of House Democrats, including Minnesota Reps. Betty McCollum and Tim Walz, who have said that the changes were necessary for their approval of the bill.
“If we get this Medicare fix done right, I would not allow [the inclusion of a public option] to derail [passage of health care reform],” Walz said during a call with reporters Thursday, indicating that he was leaning toward supporting a public plan.
House speaker Nancy Pelosi, D-Calif., has backed the inclusion of a “robust” public health-insurance option that would be pay providers at Medicare rates plus an additional 5 percent. (House leaders have also contemplated having the secretary of Health and Human Services negotiate the public plan’s rates like private insurers have to do).
To increase support for the public option attached to Medicare rates, however, Pelosi had to agree to the demands of representatives from states like Minnesota that are disadvantaged by the current fee-for-service model because they provide fewer services overall. The House membes from these states have argued that the system is fundamentally unfair because their states’ lower-cost care often produces better outcomes, yet those states are not reimbursed accordingly.
“For too long, Medicare has rewarded the quantity of medicine performed rather than the quality of medicine provided,” McCollum said during a speech to reporters Thursday. “That system has penalized our states because they deliver high quality care at low cost.”
Therefore, McCollum, along with representatives from states including Wisconsin, Iowa, Washington and Oregon, said they could not support a health-care reform bill with a public option connected to the current Medicare formula.
“This is a deal breaker for me,” said Walz, who came under Republican fire this week for appearing on Howard Dean’s website as a definite “yes” on the public option.
The website claims that its tally on public option support comes from lawmakers’ public statements and calls made to Congress.
Tony Sutton, the Republican Party chairman of Minnesota, seized on the website’s report in a Thursday press release headlined “Tim Walz Will Vote for Government Run Health Care.”
Republicans view Walz’s seat, which was long-held by the GOP, as potentially vulnerable in 2010.
Walz has previously said that a public plan would be worth looking at if it included Medicare payment reforms.
On Thursday, after the Minnesota Republican Party and the National Republican Congressional Committee sent out statements about Howard Dean’s website, Walz clarified that he was leaning toward accepting the option, but only if Medicare payment fixes are included in the final legislation.
The Mayo Clinic, which is the located in Walz’s district, praised the Medicare payment reform efforts on Thursday, but added that a lot of work still needs to be done to implement a different system.
The new measure, which will be included in the version of the health care bill that moves to the House floor, would order two studies to deal with Medicare payment issues.
The first study would be conducted by the Institute of Medicine of the National Academies to update the Medicare reimbursement formula with new data. This would be done within a year of health care reform’s passage. The secretary of Health and Human Services could immediately make payment changes based on the study’s findings.
The second study would give the institute 16 months to come up with a report that would change the funding formula from a fee-for-service model to one based on quality of care and outcomes. That plan would be submitted to the Secretary of Health and Human Services for review. At that point, Congress could file resolutions of disapproval to block implementation of the formula. That move, however, would require two-thirds support in both the House and Senate and would be subject to a presidential veto.
If a public option were indeed attached to Medicare rates, the goal would be to have it attached to the new formula before it launches. The measure also sets aside $8 billion to cover revised payments in 2012 and 2013 to help providers adjust during the transition.
The Senate has not worked out its final language, but an amendment was included in the Finance Committee’s version of the bill that addresses the fee-for-service issue.
Public option in Senate bill
Separate from the addition of that language, which both Minnesota Sens. Amy Klobuchar and Al Franken support, the Senate is reportedly considering the inclusion of some kind of government-run health insurance option — despite former statements that there was not enough support to pass the legislation with such a plan.
Franken, a Democrat, has been a supporter of a public option. Meanwhile, Klobuchar, also a Democrat., has declined to come down for, or against, the plan.
On Thursday, following reports that Senate leaders may now include a public option in the health care bill that is brought to the chamber floor, she reiterated her position that Medicare payment reform measures would be key to gaining her support.
“I want to see more competition in the insurance market, and I believe one way to achieve that is with a public option, but I want to make sure that any public option plan goes hand-in-hand with significant Medicare cost reform,” Klobuchar said. “I have been working hard for that cost reform in the Senate bill. I think co-ops should be considered, but am concerned they may not have enough leverage to drive down costs.”
Cynthia Dizikes covers Minnesota’s congressional delegation and reports on issues and developments in Washington, D.C. She can be reached at cdizikes[at]minnpost[dot]com.