DAVIS: A health plan to please liberals and conservatives

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By Lanny Davis

Now under the HAA, a second goal can be achieved that conservatives should love - the unleashing of the power of the private market and competition to keep private insurers sensitive to premium pricing, benefits and treatment of their customers, rather than a government takeover and mandates.

If under the HAA system private insurance companies don't sharpen their pencils and chase consumers for business on the state exchanges, they will lose out - or go out of business. And to repeat the base-line concept of the HAA: At a minimum private insurers will be chasing the relatively lower premiums and satisfactory benefits under a Blue Cross FEHBP-type program currently available to all federal employees, from janitors to members of Congress.

For those who demand a "public option," one hopes they can get past what seems at times like a robotic mantra and do what President Obama has asked them to do - consider supporting a surrogate that achieves the same objective of keeping private insurance companies honest through vigorous competition.

Blue Cross's FEHBP would arguably perform that function under HAA. Its premiums are affordable, since the base of people in the plan is so large. The Blue Cross FEHBP is regulated, requiring that all will be covered, regardless of pre-existing conditions. And, a little known fact: Most state Blue Cross companies enjoy significant federal tax subsidies, estimated to be over $1 billion, in a special earmark from the federal Treasury.

Affordability, regulation, strict requirements for universal and guaranteed coverage for all who wish to be insured, taxpayer subsidies: Sure seems like it walks, talks, looks like and achieves the competitive benefits of a pure government-run "public option" plan.

The fact is, no other Democratic plan in the Senate or House achieves the HAA's two core objectives: both universal coverage and free choice for all - including poor people being treated the same as rich people.

For example, according to the Congressional Budget Office, the three-committee-approved House bill, H.R. 3200, is estimated to leave out about 9 million non-elderly citizens and legal residents (not counting undocumented aliens), several million of whom are among the poor who don't know how to take advantage of Medicaid. Under the HAA, poor people can more easily be brought into the system, since they would be automatically enrolled and receive their wholly subsidized health insurance whenever they have any contact with the government, such as applying for Social Security, a driver's license or car registration.

And no Democratic proposal offers everybody the choice of purchasing a better policy on a public exchange than they have from their employers - indeed, being able to pocket in cash the difference, if any, between what the employer was paying versus the price on the state public exchange. In short, under the current Democratic committee plans, very few people could take advantage of a purely public option even if there was one. As Mr. Wyden recently wrote:

"The problem with these [Democratic] bills, however, is that they would not make the exchanges available to all Americans. Only very small companies and those individuals who can't get insurance outside the exchange - 25 million people - would be allowed to shop there. This would leave more than 200 million Americans with no more options, private or public, than they have today."

Next week, I will explain how HAA also manages to be the only proposal that is immediately deficit-neutral and then, two years later, begins producing a revenue surplus.

• Lanny J. Davis, a Washington lawyer and former special counsel to President Clinton, served as a member of President George W. Bush's Privacy and Civil Liberties Oversight Board. He is the author of "Scandal: How 'Gotcha' Politics is Destroying America." This piece is also published at http://pundits. thehill.com.