I don’t know why anyone is surprised by the CMS’s conclusion that HR 3962 would result in a very minor increase in overall national health care spending. The estimated effects of H.R. 3962 on overall national health expenditures (NHE) are shown in table 5. In aggregate, we estimate that for calendar years 2010 through 2019 [...]

The Department of Health and Human Services’ CMS concludes that the public option would provide better quality health insurance at a better value as the Secretary of HHS would be able to negotiate slightly better deals from providers and have lower administrative costs. However a stronger risk adjustment mechanism is needed as part of the public option to fully realize savings.

The CBO and CMS have both been pointing to the lack of sufficient risk adjustment mechanisms in the new exchange, and how that would hurt the public option. The new CBO analysis of the House bill demonstrates how weak the CBO believes the new risk adjustment mechanism will be: Risk adjustment payments to health insurance [...]

The traditional media has really latched onto CBO prediction that only 6 million people would use the public option. It is important to remember that the CBO is not a health insurance market expert and is known these days for being highly conservative. For example, the CBO’s analysis made several assumptions about the public option [...]

The Dutch government, who have a history of “managed competition” among for-profit health insurance companies, called the lack of well-designed risk adjustment mechanisms the Achilles Heel of a health care system. In their system, over half of all money spent on health insurance is redistributed as part of risk adjustment. Without it, insurance companies would [...]

Nancy Pelosi may not have enough votes for the “robust” public option tied to Medicare rates plus 5%. The Hill has published the official whip count [note: The Hill has now removed this page. Data was copied and posted here] of those House Democrats who oppose the robust public option. As I’ve pointed out countless times [...]

The Centers for Medicare and Medicaid Services (CMS) just released a study of the version of the health care reform bill, H.R. 3200, reported out by the Ways and Means Committee.* The study had some positive news for the robust public option tied to Medicare rates. The public option would on average have premiums 11 [...]