CBO Reports a Strong Public Option Saves More Money with Healthcare Reform

See this story in the Washington Post.  Why do we need a public option?  I filled a prescription for my son this week.  The same script from the same doctor for the same medication he has taken for at least the last four years and it was declined.  This required a call from the pharmacist to the insurance company and another call to the doctor and another wasted trip to the pharmacy to pick up his medication.  I asked the pharmacist if I could speak to the insurance company representation and was told, “that’s not allowed.”    It’s little stuff like this magnified a few million times and sooner or later, it adds up to real money.

From the story:

In a bid to wrangle concessions from the Blue Dog Coalition on healthcare reform, House leaders Thursday released CBO estimates for liberals’ preferred version of the public option that show $85 billion more in savings than for the version the Blue Dogs prefer.

Rep. Stephanie Herseth Sandlin, D-S.D., a Blue Dog co-chair, said any possible new momentum toward a public option tethered to Medicare rates is, in part, “because of the cost issue” and the updated CBO score.

The original House bill required the public plan to pay providers 5 percent more than Medicare reimbursement rates. But as part of a package of concessions to Blue Dogs, the House Energy and Commerce Committee accepted an amendment that requires the HHS Secretary to negotiate rates with providers. That version of the plan will save only $25 billion.

In total, a public plan based on Medicare rates would save $110 billion over 10 years. That is $20 billion more than earlier estimates, a spokesman for House Speaker Pelosi said.


In other words, the conservatives want to spend $85 billion more than the liberals do. Moreover, the CBO is estimating savings to the government. That is to say, the $85 billion reflects reduced federal spending on subsidies because premiums in the public plan will be lower. Savings to individuals and businesses paying lower premiums will be much larger than $85 billion, and politically, much more important.