So close, but yet so far

Sec. Sebelius has an op-ed in the Washington Post that Ezra Klein notes is absolutely an answer to Gov. Daniels’ in the WSJ from a few days ago.  In Gov. Daniels’, he asks for flexibility in how the states can implement the PPACA. In Sec. Sebelius’, she claims that flexibility already exists.

This is one of those situations when both are correct. The problem is that the “flexibility” that each is talking about is different.

When Sec. Sebelius is talking about “flexibility”, she means the following (emphasis mine):

States have discretion, for example, to offer a wide variety of plans through their exchanges, including those that feature health savings accounts. Utah and Massachusetts already operate exchanges but take very different approaches: Utah allows all insurers to participate; Massachusetts has stricter standards. Under the law, both approaches could work.

States also have the flexibility to decide what benefits plans must offer. They can choose to require basic protections, based on the typical benefits people get through their jobs, or set higher standards.

Gov. Daniels, on the other hand, says this:

All the law’s expensive benefit mandates are waived, so that our citizens aren’t forced to buy benefits they don’t need and have a range of choice that includes more affordable plans.

Ezra is heartened by the fact that since they seem to be be talking about the same thing, these are issues that can be worked out.  On many of their points, I agree with him.  They are close in terms of desires for Medicaid, for administrative support, and in terms of states’ ability to select plans for the exchange.  On this one issue, however, they are miles and miles apart.

It all comes down to the benefits.  The PPACA sets a minimum, and it’s much more robust than many plans that are offered right now. Sec. Sebelius says states can choose benefits from that minimum on up.  Gov. Daniels wants to allow plans that are significantly below that minimum. Such plans would obviously be cheaper, and more palatable to many insurance companies as well. They’d also be more attractive to healthy, young people who might not want to purchase comprehensive plans.

But this was the crux of the debate of health care reform. Supporters wanted to make sure everyone has access to comprehensive insurance without fear of higher prices or denials of coverage for chronic conditions. The only way to do that (short of scrapping the private market) was to set the regulations, add the mandate, and subsidize. Opponents – or at least many of them – don’t want to do that. They appear to fine with selling a range of insurance, from mini-med on up, and letting people buy what they can afford/choose.

This isn’t a tiny difference; it’s the whole enchilada. If you allow cheap and potentially crappy plans, that’s what many people, especially healthy people, with limited means will buy. That plan will cost less, but it will accomplish less. It will also fracture the risk pool.  If you’re OK with that, so be it. But it runs entirely against the meaning and purpose of PPACA, and what those who pushed for health care reform wanted.

I’m thrilled if Gov. Daniels and Sec. Sebelius, and others, can have rational conversations and negotiations on how to improve PPACA to benefit everyone. But I would not expect there to be much agreement on this essential point.

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