Trigger Troubles—And Why the Senate Can’t Fix Them

As closed-door discussions continue in the Senate, the resilient bad idea of triggering the public plan is once again on the table. Advocates of the trigger cast it as a compromise that will attract the support of the small number of conservative Democrats who have expressed reservations about the public option, as well as Republican Olympia Snowe, who has proposed a trigger.

But to be a compromise between public-plan skeptics and the majority of senators who support a public plan because it is central to ensuring affordable coverage while limiting the budgetary costs of reform, a trigger must have some prospect of working—and a trigger inserted into the two Senate bills now being merged would not.

A trigger would mean significantly less cost savings than a public health insurance option, and less affordable health care.

Private insurers are likely to raise premiums in anticipation of the implementation of reform without an imminent threat of public-plan competition.

Delaying a public plan may also jeopardize the cause of reform itself, because requiring Americans to buy unaffordable coverage has the potential to provoke a political backlash.

Trigger proposals demonstrate the futility of designing a workable trigger

• Criteria for triggering the creation of a public plan must concern both affordability of coverage and the growth of premiums over time—yet the triggers on the table concern only the former.
• They are all focused on the individual premiums people pay, rather than their total out-of-pocket costs. As problematic, they are vague with regard to what is affordable. Private plans could cover less or shift more costs onto patients to meet the affordability standard.
• They assess affordability based on the price people pay after receiving assistance from the federal government. This means that efforts to help people afford coverage reduce the chance of a public plan that will rein in costs for individuals and taxpayers.
• They assess whether affordability standards are met at an aggregate level, such as within states. Yet local markets vary greatly. If some markets have very high cost-growth, a trigger might not be pulled if other markets have lower cost-growth. Residents of a high-cost, low-competition area would, in effect, be held hostage by an overly aggregated measure.
• They envision a weak public plan that cannot drive competition or rein in costs.

Key characteristics of the Senate health bills keep a trigger from working and make a public plan without a trigger especially vital in the Senate.

• They leave an enormous responsibility for the regulation of private insurance to the states—which for the most part have not had the wherewithal or will to take on large private insurers.
• They have much weaker regulations of private insurance plans outside of the exchange—the plans on which most Americans will rely after reform.
• They lack strong requirements on private insurers to provide data that could be used to assess whether a trigger should be pulled.

Added to the Senate bills, a trigger would represent a backdoor way of killing the public health insurance option that a majority of Americans (and U.S. senators) support. It is past time to trigger real competition for private plans that have failed to ensure affordability or cost restraint for decades.