COVERAGE: The Old Plan of the Sea

In the odyssey of health reform, the public plan is the Proteus of our wonkish mythology -- constantly shifting, capable of divining the future, but never willing to give you a straight answer. Sorry, Politico's Pulse already took the soap opera metaphor, "As the Public Option Turns" so we had to get Homeric.

Still, trying to get a handle on where the public plan stands is like wrestling a wet seal.

Earlier in the week, Democratic House leadership felt confident they had the votes to pass a "robust public option" tied to Medicare payment rates, but the latest whip counts suggest the leadership still has some work to get 218 votes in the House.

Meanwhile, in the Senate, Majority Leader Harry Reid (D-NV) is leaning toward including a public insurance option that would allow the states to opt out. The White House is said to favor a trigger option, hoping to keep the Republican Penelope from Maine weaving at her loom.

All this is subject to change, and next week, it will no doubt change again. And the week after that, too.  However, lawmakers should not let the protean politics of the public plan obscure other key aspects of reform. Insurance market reforms like guaranteed issue and community rating, may not have the same siren call of public plan debate, but they are critical in making health reform work.

A new issue brief from the Robert Wood Johnson Foundation and Health Affairs provides a thorough overview of the issue, looking at why insurance market regulation is needed, what's proposed in the various bills, and the possible objections and barriers to proposed solutions.

The report provides a clear overview of the purpose of insurance market reform:

The goal is to provide afford­able private health insurance to people who now have difficulty getting it, either because they must purchase it on their own or because they work for a small, lower-wage business. The changes would broaden federal regulation over private health insurance, a sector that has primarily been regulated at the state level. There is substantial bipartisan support for these reforms as well as broad backing, with some conditions, from pri­vate health insurance companies

The report provides a clear and concise overview of these bipartisan reforms included in the bills being considered:

• Guaranteed issue of insurance
• Guaranteed renewal of plans
• Ending exclusions for pre-existing conditions
• Modified community rating of premiums.
• No lifetime limits on the amount insures will pay for a policy holders behalf
• Caps on out-of-pocket spending for consumers
• Insurer reporting of medical loss ratios (the percent of premiums spent on medical claims)
• "Risk adjustment" payments to insurers so that they don't lose money or make money based on the health status of their enrollees

The report also presents a nuanced view of some of the subtle differences between the House and Senate Bills, such as who would provide oversight for reform (state or federal), and  what markets would be affected by reform (all private markets or just the small and non-group markets). Criticisms of reform focus on the strength of requirements to purchase insurance, the generosity of benefits, and how these changes would affect the overall affordability of insurance for different groups of people.