After all the fuss, government health plan would cover few

WASHINGTON — What’s all the fuss about?

After all the noise over Democrats’ push for a government insurance plan to compete with private carriers, coverage numbers are finally in:

Two percent.

That’s the estimated share of Americans younger than 65 who’d sign up for the public option plan under the health care bill that Speaker Nancy Pelosi, D-Calif., is steering toward House approval.

The underwhelming statistic is raising questions about whether the government plan will be the iron-fisted competitor that private insurers warn will shut them down or a niche operator that becomes a haven for patients with health insurance horror stories.

Some experts are wondering if lawmakers have wasted too much time arguing about the public plan, giving short shrift to basics such as ensuring that new coverage will be affordable.

“The public option is a significant issue, but its place in the debate is completely out of proportion to its actual importance to consumers,“ said Drew Altman, president of the nonpartisan Kaiser Family Foundation. “It has sucked all the oxygen out of the room and diverted attention from bread-and-butter consumer issues, such as affordable coverage and comprehensive benefits.“

The Democratic health care bills would extend coverage to the uninsured by providing government help with premiums and prohibiting insurers from excluding people in poor health or charging them more. But to keep from piling more on the federal deficit, most of the uninsured will have to wait until 2013 for help. Even then, many will have to pay a significant share of their own health care costs.

The latest look at the public option comes from the Congressional Budget Office, the nonpartisan economic analysts for lawmakers.

It found that the scaled back government plan in the House bill wouldn’t overtake private health insurance. To the contrary, it might help the insurers a little.

The budget office estimated that about 6 million people would sign up for the public option in 2019, when the House bill is fully phased in. That represents about 2 percent of a total of 282 million Americans under age 65. (Older people are covered through Medicare.)

The overwhelming majority of the population would remain in private health insurance plans sponsored by employers. Others, mainly low-income people, would be covered through an expanded Medicaid program.

To be fair, most people would not have access to the new public plan. Under the House bill, it would be offered through new insurance exchanges open only to those who buy coverage on their own or work for small companies. Yet even within that pool of 30 million people, only 1-in-5 would take the public option.

Who’s likely to sign up?

The budget office said “a less healthy pool of enrollees” would probably be attracted to the public option, drawn by the prospect of looser rules on access to specialists and medical services.

As a result, premiums in the public plan would be higher than the average for private plans. That could nudge healthy middle-class workers and their families to sign up for private plans.

“The concern was that the public option would destabilize the bulk of private insurance, but in fact what Congress has fashioned is very targeted,“ said economist Karen Davis, president of the Commonwealth Fund. “It’s not going to be taking away the insurance industry’s core business.“

It’s unclear whether there are enough votes in the Senate for a public plan. The version that Majority Leader Harry Reid, D-Nev., has offered would let states opt out, probably leaving a smaller plan that the House would want.

Insurers aren’t buying the budget office analysis. Asked if it might soften that opposition, industry spokesman Robert Zirkelbach of America’s Health Insurance Plans responded with a curt “No.“

While a government plan might start out modestly, insurers fear that Congress could change the rules later, opening it up to all people and setting take-it-or-leave payments for hospitals and medical providers, instead of negotiating, as the House bill calls for.

For the same reason, employer groups also remain wary. Big companies don’t want to lose control of their health care budgets and instead have the government send them a tax bill.

“That cost is going to come back to you one way or another ... and it’s coming back in the way of taxes and liabilities,“ said Eastman Kodak’s chief executive, Antonio M. Perez, speaking for the Business Roundtable. “We just don’t believe that there are miracles out there.“

If Congress passes a public plan that’s not much of a sensation, Democrats might have reason to regret all the time and energy they invested in it.

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