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

WASHINGTON–Senate Democrats appear to be coalescing around a compromise to a so-called "public plan" for health care protection reform legislation that has met divided insurance industry opinion.

The compromise health plan negotiated by 10 moderate and liberal Democrats would call for creation of a national health plan in lieu of a public option but with a trigger requirement and a high medical loss ratio.

The trigger would be activated under the proposal if insurance companies don't come up with their own expanded coverage options.

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

Joel Kopperud, a director of government relations for the Council of Insurance Agents and Brokers reacted to the decision by saying that, "Of course we need to see the details of how this national plan would be administered through state exchanges, but on the surface, we think that this may be something that competes fairly 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 Underwriters vice president of public relations, said members and staff of her trade group have deep concerns about the newest compromise proposal.

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

"One of the primary objectives of health insurance reform in America is to provide access to high quality coverage for all Americans that is affordable," she said.

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

Rather than exploring affordability solutions, however, "many reformers propose schemes that change the foundation of our current health 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 to give details pending a cost analysis of the Medicare "buy-in" provision that would be in the measure.

But, according to information provided by several lobbying groups and congressional staffers, the Medicare buy-in option would initially be made available to some uninsured people aged 55-64 in 2011, three years before the exchanges open.

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

However, after the exchanges launch, the Medicare option would be offered in the exchanges, where people could pay into it with their subsidies.

The proposal will give insurance companies the option of creating nationally-based non-profit insurance plans that would be offered on exchanges in every state.

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

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

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

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

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