Originally published in MedPage Today

by Emily P. Walker, MedPage Today Washington Correspondent

The notion of a public health insurance plan appears to be evaporating from the Senate’s healthcare reform bill, replaced in part with an expansion of Medicare — an idea that’s meeting resistance from doctor and hospital associations.

A proposal to scrap the public plan to allow people as young as 55 to “buy in” to the Medicare program by paying premiums emerged from negotiations between five liberal Democrats and five moderate Democrats.

They met earlier this week at the request of Senate Majority Leader Harry Reid (D-Nev.), who wants Democrats to reach an agreement that can get the 60 votes Reid needs to break a threatened Republican filibuster and pass the bill.

The senators emerged from the meeting tight-lipped about whether an agreement was even reached. Their plan was sent directly to the Congressional Budget Office (CBO) for a cost estimate, and senators said they don’t want to talk specifics until CBO returns a “score.”

“I can’t tell you what’s in it,” Sen. Charles Schumer (D-N.Y.), one of the five liberal Democrats in the group of 10, told reporters Thursday.

But reports have leaked out that the proposal moves away from a public insurance option — long championed by liberal Democrats but opposed by some moderate Democrats, one Independent, and virtually all Republicans.

Instead, a public plan might be established only as a backup, “triggered” if the reform bill fails to live up to its promise of expanding coverage and providing more affordable insurance options in the private market.

In its place, there would be a national insurance program provided by private insurers, modeled after the Federal Employees Health Benefits Program, which covers members of Congress.

President Obama offered his support for the effort.

“The legislation in Congress today contains both Democratic ideas and Republican ideas, and plenty of compromises in between,” Obama said Wednesday at a healthcare event in Washington.

“The Senate made critical progress last night with a creative new framework that I believe will help pave the way for final passage and a historic achievement on behalf of the American people. I support this effort, especially since it’s aimed at increasing choice and competition and lowering cost.”

But groups that stand to lose money if they have to accept more patients under Medicare — which reimburses doctors, hospitals, and other providers at lower rate than private insurance plans — were critical of the Medicare expansion idea.

“For the majority of America’s hospitals, Medicare payments cover less than the cost of care for hospital services to seniors, making it more difficult to make ends meet,” said Rich Umbdenstock, president and CEO of the AHA, in a statement.

“The Medicare buy-in could hamper hospitals’ ability to maintain the essential public services that patients and communities depend upon and to upgrade technology and facilities that make care better.”

As part of its original support for healthcare reform, the AHA made a deal with the White House that limits total losses to hospitals under the plan to $155 billion over 10 years.

The Federation of American Hospitals (FAH) and the AMA have also voiced opposition to the plan, according to the Washington Post.

The American Medical Association (AMA), which supported the House healthcare bill, hasn’t yet offered a stance on the Senate bill, but it has opposed expanding Medicare to younger people.

“The AMA is committed to legislation to expand affordable health insurance coverage to all Americans, but the AMA has longstanding policy opposing the expansion of Medicare given the fiscal projections for the future,” said AMA President J. James Rohack, MD. “We believe a health insurance exchange without an expansion of Medicare will provide more affordable choices and better access to care for Americans ages 55 to 64.”

The bill approved by the House included a public insurance plan, so an agreement would still have to be reached when the bills are combined by a conference committee.

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