NU Online News Service, Dec.10, 3:08 p.m.EST

WASHINGTON–Senate Democrats appear to be coalescingaround a compromise to a so-called "public plan" for health careprotection reform legislation that has met divided insuranceindustry opinion.

The compromise health plan negotiated by 10 moderate and liberalDemocrats would call for creation of a national health plan in lieuof a public option but with a trigger requirement and a highmedical loss ratio.

The trigger would be activated under the proposal if insurancecompanies don't come up with their own expanded coverageoptions.

It would also include a Medicare "buy-in"; an extension of theState Children's Health Insurance Plan SCHIP, but no Medicaidexpansion beyond the 133 percent federal poverty level.

Joel Kopperud, a director of government relations for theCouncil of Insurance Agents and Brokers reacted to the decision bysaying that, "Of course we need to see the details of how thisnational plan would be administered through state exchanges, but onthe surface, we think that this may be something that competesfairly and we are very encouraged."

In other words, he said, in regards to this "new competitor,"this latest plan "sounds like it threads the needle."

But Kelly Loussedes, National Association of Health Underwritersvice president of public relations, said members and staff of hertrade group have deep concerns about the newest compromiseproposal.

"Expanding the already overburdened Medicare and Medicaidprograms would result in a vicious circle of escalating health carecosts and reduced access to quality health care," she said.

"One of the primary objectives of health insurance reform inAmerica is to provide access to high quality coverage for allAmericans that is affordable," she said.

"Many policymakers believe that insurance is not available to amajority of the uninsured due to barriers to access health care,"she said, but in fact, "the main barrier is the cost of healthinsurance."

Rather than exploring affordability solutions, however, "manyreformers propose schemes that change the foundation of our currenthealth care system which will actually make it more expensive and,therefore, less accessible for millions of Americans."

Sen. Harry Reid, D-Nev., Senate majority leader, declined togive details pending a cost analysis of the Medicare "buy-in"provision that would be in the measure.

But, according to information provided by several lobbyinggroups and congressional staffers, the Medicare buy-in option wouldinitially be made available to some uninsured people aged 55-64 in2011, three years before the exchanges open.

For the period between 2011 and 2014, when the exchanges doopen, the Medicare option will not be subsidized–people will haveto pay in without federal premium assistance, making it likely tobe expensive.

However, after the exchanges launch, the Medicare option wouldbe offered in the exchanges, where people could pay into it withtheir subsidies.

The proposal will give insurance companies the option ofcreating nationally-based non-profit insurance plans that would beoffered on exchanges in every state.

Officials of the America's Health Insurance Plans voiced concernwith the medical liability ratio (MLR) proposed under the newproposal, and with other MLR provisions in the bill.

MLR provisions govern how much a health maintenance organizationpays in medical costs as a percent of the premiums they charge.

According to one analyst who declined to be named, "It'sessentially a price control, in addition to the excise fees."

In a statement, AHIP said that mandatory liability ratios "arelikely to have the effect of reducing patients' access to programsthat improve patient safety and quality of care."