The Institute for America's Future (IAF), a progressive advocacy organization, has released a new report authored by Jacob Hacker, co-director Center on Health, Economic and Family Security, at U.C. Berkeley School of Law in Berkeley, CA. The report, entitled Healthy Competition: How to Structure Public Health Insurance Plan Choice to Ensure Risk-Sharing, Cost Control, and Quality Improvement, was co-sponsored by the IAF and the Berkeley Center. Roger Hickey, co-director of the IAF, and Mr. Hacker held a press conference on Wednesday which DOTmed News attended.

Mr. Hacker began by describing how the national debate on health care has begun focusing on an idea once obscure but now gaining interest--public plan choice. Where many plans envision creating a national purchasing pool or exchange that would allow those without workplace insurance to choose among private health plans, Hacker explained, a public plan choice means "a public plan, roughly modeled after Medicare in my vision, should be available alongside the private plans ensuring an insurance product with broad choice of providers and private plans to match the efficiency, cost control abilities and quality improvement capacities of public insurance."

Hacker said competition is designed for "meaningfully different choices." His argument for public plans competing with private plans in the exchange is that the public plan can offer values private plans are unable or unwilling to provide, including stability, wide pooling of risks, transparency, affordability of premiums, broad access to providers, and capacity to collect and use patient information on a large scale to improve care. Private plans have their own advantages, including flexibility and moving into areas of care management before the public sector. "What I'm arguing for is for public and private plans with their unique strengths and weaknesses ... able to co-exist side by side for all Americans." In competition, Hacker suggested, the playing field has diverse choice of plans which act as checks on both the public and private sector.

Hacker's envisioned plan would be Medicare-like, building upon Medicare's infrastructure and basic framework of coverage, but completely separate from Medicare's risk pool, and would depart from Medicare in a number of key respects regarding payment and benefit, such as not drawing on general revenues, and the management of the plan's contracts would be distinct from the plan itself.

In Hacker's outline of a level playing field among plans, there need to be three "R's": rules, risk and regional prices. The same basic rules need to apply to both private and public plans such as the terms of subsidies available for coverage, and not hinge on whether the plan is private or public. For risk, Hacker explained that plans should be paid different amounts by the exchange based on the expected and realized risk of the enrollees, and the plans and enrollees should not be penalized when a plan attracts less healthy enrollees. For regional pricing, Hacker said that both the public plan and the private plans should be priced within the regions, rather than the national plan having one price structure. The public and private plans can bid to provide some standard benefit package that would be a benchmark for comparing bids within regions. Once a premium level is set for the plans, subsidies would be set by the average of the premiums within the region, in order to ensure people had access to a wide variety of plans.

Hacker concluded the conference by noting the result of a poll from Healthcare for America Now in which there was overwhelming support for having a choice between public and private insurance among both Democrats and Republicans. He said even with arguments against the choice, the public still supports it in particular as a source of accountability in the market. "Allowing public and private plans to compete on a level playing field is the key to cost control and quality improvement."

The full report may be found at: http://www.ourfuture.org/files/Hacker_Healthy_Competition_FINAL.pdf

More information may be found at: http://www.ourfuture.org/healthcare/hacker

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