Debt panel chairmen call for second look at the public option

The chairmen of President Obama’s fiscal commission are calling for a second look at a robust government-run healthcare program, which Congress shelved last year following acrimonious debate.

Former Clinton White House Chief of Staff Erskine Bowles and former Sen. Alan Simpson (R-Wyo.), the chairmen of the National Commission on Fiscal Responsibility and Reform, suggested reviving the public option in the future if healthcare costs continue to soar.

They made the suggestion in a 50-page co-chairmen’s proposal released to reporters on Wednesday. It is one of many ideas for controlling the federal deficit that is likely to spark heated debate in Congress in the weeks and months ahead.

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Many liberal Democrats said they were deeply disappointed with the healthcare bill because it did not include a public option. Republicans, however, panned the idea as a government takeover of the healthcare industry.

Growing Medicare and Medicaid costs are projected to contribute significantly to the federal deficit in future years, despite passage of a landmark healthcare reform bill that cut hundreds of billions from Medicare.

In their report, Bowles and Simpson urged Congress to set a global target for total federal health expenditures after 2020 and to review costs every two years to keep the growth of healthcare spending in line with the increase of gross domestic product plus 1 percent.

If costs exceed targets, the fiscal commission’s draft proposal would require the president to submit to Congress reforms such as the public option to lower spending.

The chairmen’s proposal calls for consideration of “a robust public option” among other reforms such as an overhaul of the fee-for-service system; an increase in healthcare premiums; a premium support system for Medicare; and strengthened authority for the Independent Payment Advisory Board (IPAB), which under current law will be empowered to restrict Medicare payments beginning in 2015.

Bowles and Simpson recommended a variety of other short- and medium-term plans for cutting healthcare spending that could be used to pay for freezing scheduled cuts to doctors’ Medicare reimbursements (which doctors consider their highest political priority).

Averting cuts to doctors’ Medicare payments would cost about $275 billion over 10 years. To defray that expense in the medium term, the chairmen have suggested asking doctors and other health providers to take responsibility for slowing the growth of healthcare costs.

They suggested paying doctors and providers less, improving efficiency and rewarding quality care by accelerating payment reforms.

The chairmen also called for “comprehensive tort reform” to “reduce the cost of defensive medicine,” a proposal that is sure to get a negative reaction from Democrats and the trial lawyers who contribute to their party.