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I it 3601 S. Congress off E. Alpine Penn Field under the water tower check our site for monthly calendar Sulu Nava International Headquarters Come Visit us for LUNCH! In addition to our organic coffee, pizzas, empanadas, pastries and pies, we now prepare made to order sandwiches, salads, and even black bean gazpacho. We can get to the central goal of universal coverage that is affordable and reliable without a public option. the public option to get the essential ingredients of genuine health-care reform. It also means taking our cues from countries like Switzerland and the Netherlands. They provide universal coverage within private systems using three key approaches. The first: requiring everyone to have coverage. This is sometimes called an “individual mandate,” and it’s part of all three proposals before Congress \(the combined proposal of three House committees, called the “Tri-Committee” proposal; the Senate Health, Education, Labor and Pensions Committee proposal; and the initial proposal of Senate Finance Chairman who don’t have coverage \(with limited exceptions, such as for The rationale for a mandate is sound: Requiring everyone to have coverage creates a larger group across which to spread the risk of high medical costs. Otherwise, there’s “adverse selection:’ which causes the cost of insurance to rise because some people buy coverage only when they know they need care. Just as importantly, an individual mandate may be the best way, short of single payer, to minimize the number of uninsured. However, the effectiveness of the mandate depends on the amount of the penalty: The closer it gets to the cost of coverage, the more people will choose to buy insurance rather than pay the penalty. As odd as it may sound, progressives should actually be championing a meaningfuLpenalty. A mandate’s effectivenessas well as its fairnessdepends on whether coverage is affordable. That’s the second key, and it’s more important to progressive health-reform goals than a public option. We have to provide sufficient subsidies for people who can’t afford coverageand also can’t afford to pay a penalty for not having it. The current House and Senate proposals all include some level of subsidy for middleand lower-income individuals and families to purchase coverage. But the levels vary, and the amount of subsidies to provide is proving be a major source of disagreement as Congress hammers out a dealnot only because they are necessary for an individual mandate to be meaningful and fair, but because subsidies account for most of the costs of health reform. Senate Democrats have already pressured Baucus to lower the penalty amount for not obtaining coverage because of concerns that subsidies won’t be adequate. But instead of reducing the penalty, which we need to enforce an individual mandate, progressives should be clamoring for generous subsidies and a penalty that truly incentivizes compliance with the mandate. This is where the passion we’ve seen for the public option could really make a difference in reducing the number of uninsured and making coverage affordable. The third key to real reform is guaranteeing what I’ll call reliable coverage. Countries that provide universal coverage through a private system tightly regulate that system. We too need strong regulations to make insurers earn their profits on the basis of quality and added value rather than their ability to avoid covering or paying for sick people. Once again, all the current Congressional proposals impose new requirements on the insurance industry: no exclusions for “pre-existing conditions,” for instance, and no higher premiums for those who are sick than for those who are healthy. And they all create an essential benefits package, which would define such things as the services insurers must cover and the maximum amount of cost-sharing they can require if they want to sell coverage to people without employer-sponsored insurance. The insurance industry actually offered up such reforms several months ago. But their offer is not a signal of newfound compassion. The industry’s willingness to operate under these new requirements is contingent upon the infusion of millions of new dollars into the marketplace that will result from requiring everyone to have insurance, and imposing the penalties and providing the subsidies that will make the requirement effective. Operating under the new regulations is only financially feasible if we ensure everyone is in the risk pool. A public plan would mean a smaller private sector risk pool over which to spread the costs of care. Many progressives, thanks in part to their favorite talking heads on MSNBC and in the blogosphere, have come to believe there can be no real reform without a public option. But the public option, as Obama indicated, is merely one approach to achieve universal, affordable, reliable health-care coverage. Even with a public option, we would still need to fight for an individual mandate, generous subsidies and tough regulation. Putting our energy into these battles, rather than continuing our unnecessary game of chicken on the public option, will give us a better chance of winning the three essential ingredients of health reform. Hope Morrison is a senior consultant for Ireland and Associates, a Texas-based health care consulting firm. Previously, she worked for the Texas Health and Human Services Commission in the state’s Medicaid program, and was an aide to former state Sen. Mike Moncrief on health and human services issues. 22 THE TEXAS OBSERVER OCTOBER 2, 2009