What's the difference between "the public option" and the OPM plans in the latest Reid bill?

[levander]

OPM stands for Office of Personnel Management. I think it's the human resources department of the federal government.

So, I was looking at the latest CBO letter to Harry Reid, where they're going over the changes "the Manager's amendment" makes to the Reid bill.

From page 2:

This estimate incorporates the effects of the manager’s amendment, which would make a number of changes to the Patient Protection and Affordable Care Act as originally proposed. The changes with the largest budgetary effects include: ... replacing a “public plan” that would be run by the Department of Health and Human Services (HHS) with “multi-state” plans that would be offered under contract with the Office of Personnel Management (OPM)

From page 9:

The proposal would call on OPM to contract for two national or multi-state health insurance plans—one of which would have to be nonprofit—that would be offered through the insurance exchanges.

Now, I understand not everyone is going to be eligible for the insurance exchanges, but not everyone was going to be eligible for what everyone was calling "the public option" anyway.

Sounds like these OPM plans are a government run health insurance policy to me. What's so different between them and what everyone was calling, "the public option"?

[liskddksil]

1. The OPM plans are still run by private insurers

[levander]

2. Okay, thanks

I confused the fact that they have to *contract* with the OPM with the idea that the OPM would be running them.

[Selatius]

3. It sounds like the OPM plan just destroyed any economies of scale a Public Option could achieve.

We know that if everybody were placed into a single risk pool, then that pool would gain tremendous bargaining power in terms of negotiating the costs of medical procedures and the cost of pharmaceuticals; however, if this single pool is broken apart into many smaller pools, such as having each state manage its own pool, then you will begin to see two things: Costly duplication of activities or fifty bureaucracies to do the same thing instead of just one, and reduced economies of scale. More on the second part:

A state with a population of 3,000,000 under coverage has less bargaining power in term of negotiating drug prices, for instance, with national drug companies than a national robust Public Option that covered 100,000,000, which is roughly what one study said it would cover if everybody were given a choice between a private insurer and the national Public Option that is "robust" the way it was originally envisioned. If you represented one out of every three Americans, you have incredible power to negotiate down prices for medical procedures and negotiate down exorbitant drug prices. The more people you cover under a single risk pool, the more bargaining power you achieve. That is what it means to achieve economies of scale in terms of insurance.

[global1]

4. Can States Form Alliances With Other States And Then Bargain With The Drug Companies or Insurers?.nt

[Selatius]

5. I dunno, I believe there are constitutional issues involved there.

There may be some prohibitions or limitations on interstate alliances. If there are prohibitions there, it could be that the Founders feared such alliances within the framework of a federation could endanger the whole federation down the road by causing rifts among competing alliances, like a really bad episode of Survivor.

Edited: I just did some bit of researching. Apparently, interstate compacts can be allowed, but the major hitch is it requires the consent of Congress for any interstate venture to go forward. If several states decided to form a single-payer network that covered their respective populations, Congress must give permission to allow that.

Expect the answer from Congress to be "No." Insurance companies would lobby heavily to get Congress to kill such a proposal.

[levander]

6. Where do you find information like that?

I just did some bit of researching.

It says your edit took 7 minutes. How do you find information like that so fast on federal law?

[PBS Poll-435]

7. Commerce Clause

Might go to an Appeals court. Might even go to the SCOTUS.

And I think I might venture to guess how they would rule...