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Opt-out Clause on Public Option Puts Role of States Back in Spotlight

Among the health reform proposals under debate on Capitol Hill is a plan to allow states to opt out of a public option -- which may help legislation pass through Congress, but how would it work to drive down costs? Two experts discuss the idea with Ray Suarez.

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  • RAY SUAREZ:

    As we heard earlier, there was plenty of reaction on Capitol Hill to this idea of an opt-out to the public option.

    Now we take a closer look now at how it might work and its consequences.

    Robert Laszewski is a former insurance executive and now president of his own consulting firm, Health Policy and Strategy Associates. And Ezra Klein is a staff writer at The Washington Post who blogs regularly about health policy.

    And, Ezra, what is an opt-out provision, and how would it work?

    EZRA KLEIN, "The Washington Post": So, the basic idea is, you have a national public option, which is what liberals wanted.

    But, if Alabama doesn't want to have a public option, if California, for some reason, didn't want to have a public option, they can just say, no more, and they opt out.

    And what we heard from Senator Dick Durbin on the floor today was that they're considering having that done by the government — by — the legislature would pass a law and the governor would sign it. So, the compromise here is that the public option is national, rather than state — so, that makes liberals happy — but that states can leave, which makes conservatives, theoretically, happy, though it hasn't actually seemed to make any of them happy yet.

  • RAY SUAREZ:

    Now, Robert Laszewski, there's still a lot we don't know about the Harry Reid proposal.

    ROBERT LASZEWSKI, president, Health Policy and Strategy Associates: Right.

  • RAY SUAREZ:

    But do we know, at least, whether this is public option broadly or narrowly defined? Remind people who would be eligible to buy in if you're in a state that says, yes, let's go for it.

  • ROBERT LASZEWSKI:

    Right.

    If you're uninsured, if your employer doesn't provide health insurance, then you have access to something called an insurance exchange under what would be the new law.

    The proposal is that, amongst other private health insurance plans, you would also have access to a government Medicare-like plan. So, it would only be people who were uninsured and didn't have access to an employer-based plan that would be able to take advantage of the exchanges, relatively small number of people.

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