WASHINGTON — Democrats are seeking a compromise on a bigger government role in insurance coverage as part of President Barack Obama’s proposed health care overhaul.
At issue is whether middle-class workers and families should have the option of a government-sponsored plan that would compete with private insurers. Obama and other Democrats support the idea, which Republicans adamantly oppose.
Sen. Charles Schumer, who is working on the issue for the Senate Finance Committee, said Thursday one potential compromise is based on insurance plans that most states already offer their employees. Obama’s health secretary nominee, Kansas Gov. Kathleen Sebelius, likes the idea.
Schumer, D-N.Y., said such a plan would avoid expanding a federal program like Medicare and that a private insurer possibly could run it. Sebelius already administers that type of plan in Kansas.
At a Senate hearing, Sebelius noted that more than 30 states “have a public plan side by side with private market plans in our state employee programs.” State workers, she said, “have an opportunity to take a look at which is best suited to themselves and their families. And there has been no destruction of the marketplace.”
The insurance lobby fears that a federally backed plan could drive companies out of business.
“We are taking a look at the different state employee plans to get a better understanding of how they operate,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.
GOP lawmakers “are going to need to know what’s in the fine print,” said Craig Orfield, a spokesman for Sen. Mike Enzi, R-Wyo., a leading lawmaker in the debate.
The issue of a public plan is a major stumbling block in deciding how to rein in health costs and cover the uninsured.
“My goal is to find a plan that would be acceptable to large numbers of senators,” Schumer said in an interview. “Right now, the private insurers are totally opposed, but maybe there’s room.” A public plan could serve broader goals, he said, by pioneering innovations that profit-driven companies might be slow to adopt because of costs.
The state employee plans Schumer is looking at are similar to how big companies insure their workers. Companies budget each year for health expenses, then hire an insurer to process claims, negotiate rates with doctors and hospitals and cajole employees to follow healthier lifestyles.
In California, the state sponsors three medical network plans for employees and retirees. These plans are offered alongside traditional insurance plans. The state-sponsored plans, administered by Anthem Blue Cross, account for about one-fourth of the 1.3 million people in the state employee health program, said Karen Perkins, a spokeswoman for the California Public Employees Retirement System, known as CalPERS.