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HEALTHCARE Q & A

A look at the Senate's healthcare compromise

Senate Democrats, as an alternative to creating a government-run insurance plan, proposed creating a nationwide plan that would be operated by a nonprofit. Here's a closer look at the idea.

December 13, 2009|By James Oliphant and Kim Geiger

Reporting from Washington — Last week, Senate Democrats reached a tentative agreement on a proposal to help move the healthcare overhaul forward. Many details will become clear after the Congressional Budget Office provides estimates of the proposal's cost. Here is a look at what is known so far.

Would this proposal replace the "public option" in the bill?

The public option, a government-run health insurer that would compete with private companies, faced staunch opposition from Republicans and some Democratic moderates. The Senate proposal would, as an alternative, create a nationwide health plan that would conform to government benefit requirements but be operated by a private nonprofit. Modeled on the plan federal employees use, it would provide consumers with another option in the state insurance exchanges that would be established by the bill. In addition, the proposal would allow some people as young as 55 to buy into the Medicare program, which currently only covers those 65 and older.

How would buying into Medicare work?

Medicare is divided into four parts. Parts A and B, often referred to as "original Medicare," include coverage for hospital and standard doctor visits. Seniors are automatically enrolled in these programs when they turn 65, and the premiums and copays are minimal. Part C allows seniors to buy plans that offer more benefits than are available through original Medicare. Part D allows seniors to buy prescription drug coverage. Creating a Medicare insurance policy that could compete with private plans could require a new plan specifically for the 55- to 64-year-old age group. Such a plan would combine each Medicare "part" into a single policy that would conform to the benefits standards required for all plans sold on the insurance exchange. It's also possible that standard Medicare could be opened to include this new group, though that would present some administrative challenges.

How much would it cost to buy in?

The CBO has estimated it would cost a 62-year-old $600 a month to buy into Medicare. The bill is expected to provide subsidies for low- and middle-income Americans. It's comparable to -- or even more expensive than -- private plans for that age group, depending on the benefits provided. One reason for the high price is that people 55 to 64 years old in general need more healthcare than younger, healthier people. Another is that in private insurance plans, the cost of care for older enrollees is subsidized somewhat by the presence of younger people in the same insurance pool.

Why don't doctors and hospitals like this new proposal?

They already dislike Medicare because the government reimburses them at a lower rate than private insurers -- and in some cases, they say, doesn't even cover the cost of treatment, forcing them to shift more costs to the private sector. Expanding Medicare, they argue, would only make things worse. Supporters of the proposal argue that expanding the Medicare pool would place more pressure on providers to cut costs and be efficient.

What is the difference between this and the public option?

Medicare pays providers at set rates determined by the government. The public option would have been required to negotiate payment rates with providers, the same way private plans do. Advocates say the Medicare plan would put more pressure on private insurers to lower plan costs.

joliphant@latimes.com

kgeiger@latimes.com

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