McDermott touts healthy return of health care's 'public option'

WASHINGTON — Could the public option be revived?

Months after a Republican filibuster helped kill off a government-run health plan under the new health-care law, Seattle Congressman Jim McDermott and other U.S. House Democrats are calling anew for a Medicare-like public insurance plan that would compete with private carriers.

This time, the Democrats are taking their arguments straight out of the Republican handbook, saying a public plan would lower the deficit.

Rep. Lynn Woolsey, D-Calif., Wednesday evening introduced the Public Option Act. McDermott is among the 128 co-sponsors. Others include the chairmen of the three House committees, and their three subcommittees, with jurisdiction over health care.

Supporters say the public option under this legislation is more "robust" than what the House passed last November. Instead of the government negotiating reimbursement rates with doctors and hospitals, the new proposal calls for paying providers a flat Medicare rate plus 5 percent. Democrats in the Senate couldn't muster the votes for a public option last year, and it was left out of the final overhaul bill.

On Thursday, Woolsey released an analysis by the nonpartisan Congressional Budget Office (CBO) that said the new public option would reduce the federal budget deficit by $53 billion between 2014 and 2019. As with traditional Medicare, the government would collect premiums and pay out claims, although administrative tasks could be outsourced.

The CBO also estimates that a public plan would attract about 13 million, or a third, of the 38 million Americans who are expected to buy coverage through insurance exchanges that would begin operating in 2014.

Premiums for a public plan would be about 5 percent to 7 percent lower on average than for comparable policies sold by commercial insurers, the CBO said.

That, McDermott contends, would be a tough argument for even the GOP to reject. Reining in health-care spending is the weak link in the overhaul, he added.

"We still think the public option is the best way to go," McDermott said. The only way to overcome political defeat with a good idea is, "You just keep coming back."

Republicans and many insurance companies opposed a public option last time around, calling it a government takeover of private industry. A few Democrats in the Senate also were uneasy with the idea.

Michael Foley, spokesman for Group Health Cooperative, said the Seattle health co-op is reserving judgment on the new bill pending details. The legislation would allow for "innovative payment mechanisms" that could boost reimbursement for quality and efficiency.

Simply paying doctors and hospitals rates based on Medicare for each service performed, Foley said, "is not a model that is working."

Joshua Welter, an organizer with Washington Community Action Network, an advocacy group, which strongly backs a public plan, hailed the new bill as a sign that Congress is listening to small businesses and individuals who are struggling to afford coverage.

"They've been demanding having a choice," Welter said, and asking Congress "to not leave them at the mercy of insurance companies."

Kyung Song: 202-662-7455 or ksong@seattletimes.com